Key Takeaways
- The IRS allows one IRA-to-IRA rollover in any 12-month period, counting all of a person’s IRAs together as one.
- A second 60-day rollover within that window gets taxed as a withdrawal, so the full amount is added to that year’s income.
- A married couple, both 70, with $100,800 of taxable income would owe $22,000 of extra federal tax on a second $100,000 rollover at 2026’s 22% rate.
- A direct trustee-to-trustee transfer gets around the limit, since the IRS doesn’t count it as a rollover.
If you’re moving IRA money around before the year ends, maybe to chase a better rate, check one date before you take the money out. The IRS allows just one IRA-to-IRA rollover in any 12-month period, and it taxes a second one as an ordinary withdrawal.
Chris Stein made the timing point on The Retirement and IRA Show earlier this month: the limit is one rollover a year, “which they defined as every 365 days,” and “it’s actually measured in days.” So money you take out for a rollover in December still blocks another one next November.
A second $100,000 rollover adds $100,000 of income
Let’s take a hypothetical: say you and your spouse are both 70, file jointly and have $100,800 of taxable income this year. Earlier in the year, you took $100,000 of pretax money out of one IRA and put it into another yourself, a 60-day rollover. A few months later, you take another $100,000 out to move it again, and you get it back in on time. But since that second distribution came within 12 months of the first, the IRS doesn’t treat it as a rollover, and the whole $100,000 goes into this year’s income.
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One rollover per person, every 12 months
The limit is in the tax code. The IRS says you can make only one rollover from an IRA to another IRA, or back into the same one, in any 1-year period, however many IRAs you own. It counts your traditional, Roth, SEP and SIMPLE IRAs together as one. And the 12 months start on the day you receive the money, even if you put it back weeks later.
It hasn’t always worked this way. The IRS’s own guide used to read the limit as one rollover per IRA, so someone with five IRAs could do five a year. Then the Tax Court ruled against a taxpayer named Bobrow in 2014, and since the start of 2015 the IRS has counted all of a person’s IRAs together. Jim Saulnier summed up the court’s message on the same episode: “You’re only allowed to do one per year per taxpayer.”
The whole $100,000 is taxed at 22%
For 2026, the 12% bracket for a married couple filing jointly tops out at $100,800 of taxable income, and the 22% rate runs from there to $211,400. Your $100,800 already fills the 12% bracket to the top. Add the $100,000, and your taxable income comes to $200,800, still short of where 24% begins. So every dollar of the second rollover is taxed at 22%: $100,000 × 22% = $22,000 of extra federal tax.
Ouch.
And if you’ve already put that second $100,000 into an IRA, the IRS can treat it as an excess contribution, which is taxed again every year it stays in the account.
Ask for a direct transfer instead
Fortunately, this one is easy to avoid: have the money go straight from one IRA custodian to the other. The IRS doesn’t count a trustee-to-trustee transfer as a rollover, so you can do as many as you like in a year. A check made out to the new custodian for your IRA still counts as a direct transfer, even if it’s handed to you to pass along. And if you’ve already done one 60-day rollover this year, write down the day the money reached you, and don’t take another IRA withdrawal to roll over until 12 months have passed.
Frankly, I don’t see a good reason to move money between IRAs by a 60-day rollover at all. A direct transfer gets it to the same place without putting the whole balance on your tax return. And for a couple in this spot, a bigger second rollover would cost even more, since every dollar past $110,600 would push their taxable income over $211,400 and be taxed at 24%.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
