A new IRS ruling may provide tax relief on late rollovers by some IRA owners.
Normally, if you take money out of your IRA, you're responsible for tax on the distribution, plus a potential 10% penalty if you make an early withdrawal – before you reach age 59½. But you can avoid current tax liability if you roll over funds from the IRA into another IRA within 60 days.
The surest way to do that is to make a "trustee to trustee" transfer, from one financial company to another. If the money never touches your hands, none of it will be withheld for possible taxes. However, if you have an immediate but temporary need for money, you could use the rollover process to give yourself a short-term loan—you can have funds paid to you and then redeposit the same amount in an IRA within 60 days. Yet while you won't ultimately be taxed on the rollover, 20% of the amount that you withdraw will be withheld for taxes; you'll need to recoup the money when you file your tax return.