How to handle an Indirect Roth to Roth Rollover when deposit and withdrawal dates don't align

What you're dealing with is a bit tricky but not impossible to sort out. With Roth-to-Roth transfers, timing is everything when you do it indirectly. The IRS gives you a 60-day window to complete an indirect rollover between retirement accounts. The date mismatch won't automatically disqualify you from proper rollover treatment, but it does complicate things. Since you technically used different money to fund the Fidelity Roth before the Vanguard distribution arrived, it could look like you made a new contribution to Fidelity and took a distribution from Vanguard. Original Roth contributions can indeed be withdrawn without tax or penalty at any time, but the proper way to document a rollover is different from a withdrawal and recontribution. I'd recommend getting documentation from both institutions showing the transactions and the amounts. You might need to file Form 8606 to properly report this. The fact that you only moved original contributions helps your case considerably.

I had almost this exact situation last year and I found this amazing service that helped me figure it out. I used https://taxr.ai to analyze my statements from both brokerages and they confirmed I could treat it as a proper rollover despite the timing mismatch. Their system looked at my specific dates and transactions and gave me a detailed explanation of how to handle it on my taxes. The key was documenting the connection between the two transactions and showing intent. Since you're only dealing with original contributions (not earnings), you have a much stronger case. Their analysis helped me avoid both penalties and having to claim it as taxable income.

Just wanted to update - I decided to try the taxr.ai service after reading about it here, and wow, it was exactly what I needed for my rollover issue! I uploaded my statements from both companies and it immediately identified that I was dealing with an indirect rollover that was completed within the 60-day window, even though the money came from different sources. The analysis gave me the exact paragraph from IRS Publication 590-A that applied to my situation and explained how to document it properly on my amended return. The service even generated a clear explanation letter to include with my forms that explained the timeline of transactions. Definitely saved me from paying unnecessary taxes on what was actually a valid rollover. The IRS accepted my amended return without any questions!

Instead of stressing about amending your return yourself, you might want to try Claimyr if you need to talk directly with the IRS about this issue. I spent WEEKS trying to get through to a human at the IRS about a similar rollover problem last year. After 20+ attempts and hours on hold, I found https://claimyr.com and used their service - they actually got me connected to an IRS agent in under 45 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS rep I spoke with confirmed that as long as the indirect rollover was completed within 60 days, the fact that I used different funds initially wasn't an issue - what mattered was documenting the connection between the transactions. Saved me from paying penalties on my 401k to IRA rollover when the timing was off by a few days.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I was desperate enough to try it for my own IRS situation regarding a Roth conversion with mismatched paperwork. I figured it couldn't be worse than my previous attempts. The service actually worked exactly as promised. I got a call back within 35 minutes with an IRS agent already on the line. The agent helped me understand exactly how to document my Roth conversion properly and confirmed that I needed to file Form 8606 with my amended return. They even gave me direct fax information for sending supporting documentation. The IRS person actually told me something crucial - that when dealing with Roth rollovers of original contributions, the most important thing is documenting the paper trail connecting the transactions, not necessarily that the exact same dollars moved between accounts. Completely changed my understanding of how to handle my situation!

Make sure you keep ALL documentation from both Vanguard and Fidelity! The key thing with indirect rollovers is proving the connection between the distribution and the deposit. Even tho the dates don't match perfectly, if you can show it was all part of the same rollover intent and within the 60-day window, you should be fine. Also remember you can only do ONE indirect rollover per 12-month period across all your IRAs. If you did any other rollovers during the year, that could complicate things. The one-rollover-per-year rule applies even if the rollovers involve different IRAs.

Sorry for the dumb queston but how do you know if you moved "original contributions" vs earnings in a Roth IRA? I've had mine for like 8 years and have no idea which is which when I look at my balance. Is there a way to tell? This is making me realize I don't understand something basic about how these accounts work.

The timing mismatch isn't necessarily a deal-breaker, but you'll need to be very careful about how you document this. Since you moved the money to your Fidelity Roth before the Vanguard distribution was complete, the IRS might view this as two separate transactions: a distribution from Vanguard and a new contribution to Fidelity, rather than a proper rollover. However, since you're dealing with original contributions only, you have some flexibility. Original Roth contributions can always be withdrawn tax and penalty-free, so even if the IRS doesn't accept this as a rollover, you shouldn't owe penalties on the Vanguard distribution. For the amended return, you'll want to include Form 8606 and a detailed explanation showing the connection between the transactions. Make sure you have documentation from both institutions with dates and amounts. Given that it's only $1,350, you might want to weigh the cost of professional help against just treating it as a contribution withdrawal and recontribution - which would still be penalty-free but might affect your annual contribution limits. The key is proving intent to roll over within the 60-day window, even though the funding sources got mixed up.