FUND YOUR ACCOUNT

Fund your account before you put it to work

Before your self-directed account gets its investment freedom, you must first fund it by making a new contribution and/or transferring or rolling over an existing account to your financial custodian (that’s us). 

Once your funds are secure, you’re free to focus on the big picture while we process your transaction.

Transfers and rollovers are relatively similar transactions in that both involve the movement or consolidation of tax-advantaged money from one retirement account into another, while a contribution is a deposit of non-tax-advantaged funds into a self-directed account. 

TRANSFERS

A transfer is the movement of funds between identical or similar account types, such as:

  • Traditional IRA to Traditional IRA
  • Roth IRA to Roth IRA
  • SEP IRA to Traditional IRA 

We will contact the resigning custodian on your behalf and begin the transfer process once we have received a Transfer/Rollover form. Your custodian may accept a faxed copy of the form, but they may also require a signature on an original copy.

If your resigning custodian will accept a fax, please complete the following steps:

  • Log in to the client portal.
  • Click “Messages” at the top of the screen.
  • Compose a message to specify that you’re submitting a transfer request.
  • Click “Choose File(s)” to attach your completed Transfer/Rollover form to the message.
  • Click “Submit” to send the form directly and securely to NDTCO.

If your resigning custodian requires your signature on original paperwork, please print, sign, and mail the form to our office for processing:

New Direction Trust Company
1070 W. Century Drive
Louisville, CO 80027

Your previous custodian will send transferred cash and assets directly to us for deposit into your self-directed account, with the exception of precious metals. We will direct shipment of transferred gold, silver, platinum, or palladium to the depository of your choosing.

No. Because the funds are moving directly between custodians, the IRS will not be notified about transfer activities.

No. Direct transfers between custodians do not carry tax implications.

Yes. You can move or consolidate assets in the same manner as cash for transfers and rollovers. For example, if your account owns precious metals, you can transfer those assets to another IRA without having to liquidate them first.

No. The IRS does not limit IRA-to-IRA transfers. However, there are limitations on IRA-to-IRA rollovers: you may only complete one 60-day rollover during a 12-month period.

Contact your receiving custodian to complete their transfer paperwork and learn about their transfer process. NDTCO will accept a faxed copy of transfer paperwork from your receiving custodian.

ROLLOVERS

A rollover is the movement of funds between dissimilar account types with the same tax statuses, such as:

  • 401(k) to Traditional IRA
  • 403(b) to Traditional IRA
  • Roth 401(k) to Roth IRA

Contact your previous plan administrator to initiate their rollover process, which may include their own forms. You'll also need to complete and submit our Transfer/Rollover form for us to be able to accept/deposit any cash or assets received. To submit the form:

  • Log in to the client portal.
  • Click “Messages” at the top of the screen.
  • Compose a message to specify that you’re submitting a transfer request.
  • Click “Choose File(s)” to attach your completed Transfer/Rollover Form to the message.
  • Click “Submit” to send the form directly and securely to NDTCO.

Some custodians will require a letter of acceptance to release the funds. If so, please contact NDTCO, and we will draft one for you.

Rollovers can occur directly or indirectly. With a direct rollover, your previous custodian makes the rollover check payable to your new custodian and sends it either to you or to your custodian for deposit into your new account. With a direct rollover, you can avoid the 20% federal withholding requirement for taxes.

With an indirect rollover, your previous custodian makes the rollover check payable to you for deposit into your personal account. You must then re-deposit the funds into your new account within 60 days. An indirect rollover requires your previous custodian to withhold 20% in federal taxes. Accordingly, when re-depositing the rolled funds into your new account, you will have to make up the 20% difference out of pocket.

If you do not re-deposit the full rollover amount within 60 days, the IRS will consider it a distribution and tax it as income (plus a potential premature penalty tax if you are under the age of 59 ½).

Yes. Rollovers are reported to the IRS as cash or assets leaving one trustee and being received by another. Rollovers must be completed within 60 calendar days. Otherwise, the balance will be taxed as income and early distribution penalties may apply.

No. If properly executed within the required time period of 60 days, there is no tax associated with a rollover.

Yes. You can move or consolidate assets in the same manner as cash for transfers and rollovers. For example, if your account owns precious metals, you can roll those assets to another account without having to liquidate them first.

The IRS limits you to one 60-day rollover between IRAs during a 12-month period. However, there is no limit to rollover activities between IRAs and non-IRAs (e.g., 401(k) to IRA, 403(b) to IRA, TSP to IRA).

To roll cash or assets out of your NDTCO account:

  • Click here to access our Distribution and Notice of Withholding Form via Adobe DocuSign.
  • In Section 2. Distribution Type, choose “Rollover Distribution.” Complete the remainder of the form with any applicable information, provide your electronic signature, and submit the form.
  • NDTCO will require a Letter of Acceptance from your receiving custodian. Contact your custodian to request this letter, and forward it to our office through the client portal.
    • Click “Messages” at the top of the screen, compose a message, attach the Letter to the message, and submit it directly and securely to our office.

CONTRIBUTIONS

A contribution is a deposit of non-tax-advantaged funds into a self-directed IRA, Solo 401(k), or another such account. Think of a contribution as bringing a check to the bank for deposit.

To make a contribution, simply log in to the client portal: 

  • Click “Contributions” on the left side of the screen.
  • Indicate the contribution type (a deposit of your personal money would be “Contribution”), the contribution year, and provide your bank information.

NDTCO will execute an ACH transfer into your account, and the funds will be available after five business days.

Annual contribution limits vary by account type, account holder age, and account holder income. These limits may be revised by the IRS each year. 

You can make contributions for a given tax year until the tax filing deadline in the following calendar year (usually on or around April 15, plus extensions). For example, you may contribute for the 2020 tax year until April 15, 2021.

All annual contribution activities will be reported and submitted to the IRS via Form 5498, which is issued directly to the IRS after the tax filing deadline. You will also receive an account statement at the beginning of each year with the same information, which you can use for your own tax-filing purposes.

Traditional IRA

If you have earned income for a given year, you can make a Traditional IRA contribution of your personal money for that year. You can contribute up to $6,000 per year in 2021.

SEP IRA

You can contribute the lesser of 25% of compensation or $58,000 in 2021. 

Roth IRA

If you have earned income for a given year, you can make a Roth IRA contribution or deposit of your personal money for said year. You can contribute up to $6,000 per year in 2021.

SIMPLE IRA

Employees can enjoy employer contributions while making contributions of their own. Employees can contribute 100% of their compensation up to $13,500 in 2021.

Health Savings Account

You must have a high-deductible health insurance plan to make HSA contributions, and you can contribute up to $3,600 in 2021 if you have single health insurance coverage.

Solo 401(k)

As an employee, you can contribute 100% of your compensation up to $19,500 in 2021. As an employer, you can contribute 25% of compensation up to $37,500.

Coverdell ESA

You can contribute up to $2,000 per year in 2021. ESA contributions are not deductible from your income for tax purposes.