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The easiest way to stay clear of tax penalties is to do a direct transfer of your funds from your employer-sponsored plan into an IRA Rollover account. The process is fairly simple, but it may help to call the company where you plan to direct the money for guidance. You should be able to transfer the funds directly via wire transfer, but if not, have the plan trustee make out the check in the name of the new account in care of its custodian, which is your new financial institution. This will allow the transfer to qualify as a direct rollover. You can have the check made out to you, but be sure to deposit with the IRA custodian within 60 days so that the IRS doesn't count it as a taxable distribution and require you to pay taxes on the entire amount. Even if you make the 60-day deadline, you still risk paying unnecessary taxes because 20 percent of your funds will be withheld to pay income taxes. You will need to find cash to replace that money and put it in your rollover IRA within 60 days so that it is not counted as a taxable distribution.