How to Convert a 403B to an IRA
- 1). Select a 403b to IRA transfer if you have no need to touch the money between it being moved from your 403b to your IRA. This is the simplest way to move the money, because your financial institution automatically makes the transfer. However, if you want to use the money for up to 60 days before redepositing it, you can opt for a rollover. If you choose a rollover, skip to step 3.
- 2). Request a direct transfer by completing the transfer request form available from your financial institution. The form will require your 403b and IRA account information. Once you have submitted the form, your financial institution will transfer the money. You do not have to report the transfer on your income taxes.
- 3). Request a distribution from your 403b plan, if you want to roll over the money to your IRA, by completing a 403b plan distribution request form, available from your financial institution. You will be paid 80 percent of the money you request. The remaining 20 percent will be withheld by your financial institution in case you do not complete the rollover and end up owing taxes and penalties as a result.
- 4). Redeposit the amount requested, not the amount received, into your traditional IRA within 60 days to complete the rollover. For example, if you requested $4,000 you would have only received $3,200, but you would still need to put $4,000 into your traditional IRA.
- 5). Report the amount of the rollover on your taxes as a nontaxable pension distribution. On form 1040, you would report the amount of the rollover on line 16a and $0 on line 16b. Then write "rollover" next to line 16b.