Moving money into your account can be a non-event at tax time or a reportable — sometimes taxable — transaction, depending on how you do it. This article compares the tax treatment of each funding method.

New money you contribute counts against your annual IRS contribution limit. Traditional IRA contributions may be tax-deductible depending on your income and whether you're covered by a workplace plan; Roth IRA contributions are never deductible (qualified withdrawals are tax-free later instead). Contributions are reported to the Internal Revenue Service (IRS) by Digital Trust, our custodian, on Form 5498.

A direct transfer between IRAs of the same type is not a taxable event and — unlike a rollover — is generally not reported to the IRS at all. No withholding applies, and there's no limit on how many transfers you can make.

A direct rollover from an employer plan to an IRA is not taxable, but it is reported: your old plan issues Form 1099-R and Digital Trust reports the incoming rollover on Form 5498. The two filings offset on your return when completed correctly.

An indirect rollover — where the money passes through your hands — is where tax risk concentrates. You must redeposit the full amount within 60 days to avoid it being treated as a taxable distribution (plus a possible early-withdrawal penalty), employer plans typically withhold 20% that you must make up out of pocket to complete the full rollover, and you're limited to one indirect IRA-to-IRA rollover per 12 months. See Direct vs. indirect rollovers — what's the difference?

Converting pre-tax funds to a Roth IRA is a deliberately taxable event: the converted amount counts as ordinary income for the year, valued as of the conversion. Optional tax withholding is available on the conversion form, and the conversion is IRS-reported. See Roth conversions — how they work.

Money moving custodian-to-custodian between like accounts stays a non-event; money that changes account type (conversion) or passes through your hands (indirect rollover) is where taxes and deadlines appear. Which method fits your situation is a judgment call — we recommend consulting a tax advisor or attorney for guidance specific to your situation.

Will I get a tax form for funding my account? For contributions and rollovers, yes (Form 5498, and a 1099-R from the sending plan for rollovers). For a direct IRA-to-IRA transfer, generally no. See How Digital Trust reports to the IRS on your behalf.

Is a rollover "income" on my return? A properly completed direct rollover is reported but not taxed. An indirect rollover that misses the 60-day window becomes taxable income, possibly with penalties.

Can funding methods be combined? Yes — for example, transferring an existing IRA and also making an annual contribution. Each piece keeps its own tax treatment and reporting.

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