Fund Your Account

A direct transfer is the movement of IRA funds or assets directly from one IRA custodian to another. Through a direct transfer, the IRA owner never takes possession of their retirement funds or assets. The main advantage of a direct transfer is that there is no tax liability or IRS reporting with the distribution. This is because funds are transferred from one institution to another. In most cases a direct transfer is a simpler option as it avoids having to comply with the 60 day rule and the possibility of incurring taxes and penalties.

It’s easy to request a direct transfer for your IRA funds or assets.

• If you don't already have an account with us, you’ll need to open an account and set up an IRA. 
• If you’re an existing account holder, proceed to the IRA Transfer Request Form.

 

A direct transfer usually takes about 10-14 days. This time frame may be reduced if you request overnight delivery, wire transfer of cash or make arrangements with your resigning IRA custodian to process via fax.

It’s important to remember when transferring assets in-kind (other than cash), the assets must be something that STRATA Trust Company will accept and hold. If the asset(s) to be transferred is property (directly-owned) or a private equity or private debt investment, please refer to the appropriate Investment Checklist and Form for that investment type. Direct transfers of publicly traded stocks, bonds and mutual funds require a brokerage account with any clearing firm or discount brokerage.

An IRA rollover is the movement of funds between two qualified retirement plans, such as from a 401(k) plan to an IRA, or from one IRA to another IRA. Rollovers may be subject to federal income tax unless all requirements are met (completed within 60 days and the same property is rolled over). Rollovers typically occur when you change jobs or retire and can take 2-6 weeks to complete. Rollover rules, which became effective in 2015, now limit each taxpayer to one IRA rollover during a 12-month period. Rollovers usually take place by one of these two methods: Indirect Rollover or Direct Rollover Consult your tax professional or contact us for assistance to make sure you understand and follow the rules.

A direct rollover is when you roll over from a qualified retirement plan and your plan administrator makes the rollover check payable to your IRA custodian, in which case it may be mailed either to you or to your custodian. By choosing a direct rollover, you can avoid the normal 20% federal withholding requirement for taxes. An indirect rollover is when your plan administrator makes the rollover check payable to you for deposit into your own personal account. With an indirect rollover, it is then up to you to redeposit the funds into the new IRA within the allowed 60-day period to avoid penalty. Also, an indirect rollover requires that your plan administrator withhold 20% for federal withholding taxes — and you must rollover the additional 20% withholding out of pocket. If you do not make up the difference of the withheld amount, the IRS will consider it a distribution and will tax it as income. The amount may also be subject to an additional premature penalty tax if you are under age 59½.

By rolling over an ex-employer’s retirement plan into a Rollover IRA, you maintain the tax-deferred status of your retirement account. Also, a Rollover IRA will allow you to consolidate all of your ex-employer’s retirement accounts into one IRA, making it easier to manage your retirement investments. A significant advantage of using a Rollover IRA versus leaving your retirement assets with an ex-employer is increased investment flexibility.   Other advantages:

• More Control

When the rollover process is complete, you’ll no longer be restricted by the rules and policies of your former employer's retirement plan. In addition, you can avoid potential problems seen with some retirement plans such as untimely statements, lack of account information, limited investment options and any risk of the plan getting tangled in a bankruptcy matter should the former employer encounter financial troubles.

• Avoid Withholding and the Tax Risk

If you request a check from your employer-sponsored retirement plan, your employer will have to withhold 20% for federal income taxes. Unless you initiate a direct rollover to an IRA or transfer into a new employer’s plan, you will need to come up with the 20% from your own pocket in order to avoid taxes and early withdrawal penalties. By requesting a direct rollover to an IRA, you can avoid the withholding and the risk of missing the 60-day deadline.

• Keep Your Money

By rolling over funds or assets, you will maintain the tax-deferred status of your retirement money and, best of all, you won’t have to pay taxes on your earnings until you withdraw the money. If you request a check from your employer-sponsored retirement plan, your employer will have to withhold 20% for federal income taxes.   

• Greater Investment Diversification

Your previous employer’s plan probably had between 10-15 mutual funds from which to choose. By completing an IRA rollover, you will increase your investment options and improve your investment flexibility. You will also maintain the tax-deferred status of your retirement money and, best of all, you won’t have to pay taxes on your earnings until you withdraw the money.

• Accessibility

Because you cannot take a loan out against your IRA as permitted by some 401(k) plans, penalty-free withdrawal options are available with IRAs for events such as a first-time home purchase or for certain education expenses.

• Estate Planning

By naming a beneficiary on your IRA, that beneficiary would be able to take payouts from the inherited IRA over his or her life expectancy, thus stretching the life of the IRA account. Many employer-sponsored retirement plans require non-spouse beneficiaries to take a one-time lump distribution.

• An Opportunity for Roth Conversion

The income limitation that had once prevented many individuals from converting to a Roth IRA no longer applies. Now all individuals are eligible to convert regardless of your Modified Adjusted Gross Income (MAGI). Although a Roth conversion is a taxable event, a tax professional can help you determine if the potential long-term tax advantages of converting outweigh the short-term tax consequences.

• When you retire, change jobs or separate from employment for any reason, you are entitled to receive a distribution of your 401(k), 403(b), 457 or Thrift Savings Plan retirement funds and rollover to an IRA.
• When you receive a distribution of cash and/or assets from an existing IRA, you have 60 days to complete the rollover of the same property in order to avoid taxes and possible penalties.

Whether you are retiring, changing jobs or separating from employment for any other reason, leaving a job can be the perfect opportunity to reevaluate your retirement plan needs. Moving your retirement funds to a Rollover IRA can seem like a daunting task, but it is really quite simple if you follow these easy IRA rollover rules: Step 1: Contact your plan administrator to get the distribution packet and complete the paperwork by selecting a direct rollover to STRATA. Step 2: If you’re not already an account holder, you’ll need to open an IRA. Just follow the easy steps outlined in the IRA Account Kit.   Step 3: Return the completed forms in the distribution packet to your plan administrator and provide a copy to STRATA.

The IRS limits you to only one 60-day rollover during a 12-month period when rolling from one IRA account to another IRA. In addition, the same property rule applies, which means that you must rollover the same property (cash or in-kind assets) that was distributed to you from the other IRA.

You can request a distribution from another IRA and complete the rollover of the same cash or assets, generally in less time than it takes to complete a direct transfer. However, it is a reportable event which means the resigning IRA custodian will report the distribution on an IRS Form 1099. A distribution from your IRA is usually done either in the form of a check (if you've requested a liquidation) or as an in-kind distribution (if you requested re-registration of the assets). You then have up to 60 days to reinvest the funds or re-register the assets to your Rollover IRA. If the funds or assets are not rolled over within 60 days, taxes and possible penalties would be incurred. Important Note: A 2014 court ruling has changed the IRS's position regarding how often IRA rollovers may be completed. Since 2015, only one IRA-to-IRA rollover can be completed. Please review the One-Rollover-Per-Year Rule for more on this limit.

A direct rollover from an employer’s retirement plan generally takes 2-6 weeks, depending on how long it takes the plan administrator to process it.

Visit the IRS website to learn more about IRA Rollovers of employer retirement plans and IRA distributions.

Individuals are eligible to make IRA contributions if they have earned income. Earned income includes taxable employee compensation and net earnings from self-employment, as well as certain disability payments. The two ways to get earned income is to work for someone who pays you or if you own a business or farm. To see a complete list of what does and does not qualify as earned income please visit the IRS website. There is a spousal IRA exception to the earned income rule if you are married filing jointly and have a nonworking spouse. You may allow a working spouse to make contributions on behalf of the non-working spouse. This exception applies if the working spouse has income equal to both contributions.

The process can take as few as 1-2 days.

To contribute to your IRA with STRATA, simply follow these easy steps:

1. Make your contribution check payable to: STRATA Trust Company
2. Write your account number and reference the year of the IRA contribution on your check
3. Complete and include a Deposit Certification with your check. Mail your check and Deposit Coupon to:  STRATA Trust Company, PO Box 849, Austin, TX 78767         

If you are eligible to make an annual IRA contribution, you may contribute up to the maximum of $6,000 if under age 50 or up to $7,000 if age 50 or over. You may contribute as often as you wish during the year (monthly, quarterly, etc.) as long as you do not exceed your eligible limit, which cannot exceed the maximum of $6,000 if under age 50 or $7,000 if age 50 or over. With a Simplified Employee Pension (SEP), the annual contribution limit increased to $61,000 for 2022, enabling a quick source of funding for a self-directed SEP IRA. Plus, you may still make an additional annual IRA contribution of $6,000 (or $7,000 if age 50+), you can quickly amass a sufficient balance to start self-directing an IRA.

The 2022 tax-filing and IRA contribution deadline is April 15, 2023 (excluding extensions). The envelope must be postmarked to STRATA (not your dealer) by April 15 (excluding extensions).

You may send funds to your IRA by check, ACH, or wire. You will need to complete and submit the Deposit Certification form with your contribution to ensure the funds are deposited for the proper tax year. If no tax year is selected, we will apply the contribution to the current tax year.  

If you are contributing to the current tax year, your contribution can be made as early as January 1.

If you are eligible to make an annual IRA contribution, you may contribute up to the maximum of $6,500 if under age 50 or up to $7,500 if age 50 or over. You may contribute as often as you wish during the year (monthly, quarterly, etc.) as long as you do not exceed your eligible limit, which cannot exceed the maximum of $6,500 if under age 50 or $7,500 if age 50 or over. With a Simplified Employee Pension (SEP), the annual contribution limit increases to $66,000 for 2023, enabling a quick source of funding for a self-directed SEP IRA. Plus, if you also consider making an additional annual IRA contribution of $6,500 (or $7,500 if age 50+), you can quickly amass a sufficient balance to start self-directing an IRA.

The 2023 tax-filing and IRA contribution deadline is Monday, April 15, 2024. The envelope must be postmarked to STRATA (not your dealer) by April 15 (excluding extensions).

You may send funds to your IRA by check, ACH, or wire. You will need to complete and submit the Deposit Certification form with your contribution to ensure the funds are deposited for the proper tax year. If no tax year is selected, we will apply the contribution to the current tax year.