QUESTION:
Can I transfer funds from my Solo 401K to my IRA without withholding taxes being paid? I transferred money from my IRA to my Solo 401K without any withholding.
ANSWER:
Generally, unless you are age 59 1/2 or over, only amounts that were previously transferred to your solo 401k from other IRAs or former employer plans can be transferred to an IRA. These are IRS statutory rules. If you qualify, the movement of solo 401k funds or assets to an IRA is reportable to the IRS on Form 1099-R as direct rollover but it is not taxable as long as the funds and/or assets are directly deposited to the IRA.
