The Internal Revenue Service does not always offer the clearest explanations. The first set of rules about IRA rollovers were so fuzzy that the changes were put off until this January 1.

Understand that in a true rollover, the money is transferred directly to the owner, who then has 60 days to put it into another IRA or have to pay taxes—and maybe a penalty—on the money. (And the IRS is sticky; being even one day late can cost taxes and penalties.) Originally, one could roll over each IRA once a year, no matter how many IRAs one had. No more. Now, an IRA owner can do just one rollover in a 12-month period, period.

What hasn’t changed, though, is the trustee-to-trustee transfer, in which the owner never actually touches the money. There are no limits on how many such transfers can be made. Many financial experts consider such transfers much safer, feeling that it can be dangerous to treat IRAs as a source of short-term loans.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

http://www.nickersonpa.com/