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I had $500 sitting in a TIAA-CREF account from over a decade ago. They liquidated all their older assets under $5K and mailed me a check for $400, deducting 20% for federal income tax.

Can I roll this over into an IRA account I have with Vanguard? I think the way to do this is to just add the $500 as a direct bank transfer. Is that right, or do I have to do a proper roll-over? If so... how?

In any case, how do I recover the $100 in federal income tax? I assume I have to work some CPA wizardry when I file 2020 taxes, but I'm not sure how to do this. Can somebody please point me to the appropriate resources?

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Have 60 days passed yet? If not, deposit the $500 (not $400) in the IRA and designate it as a rollover, a transfer that went through your hands. You'll reconcile this in your tax return as TIAA will sent you a 1099 showing the withdrawal and the tax paid.

Shame on them. They should have given you a warning, even a 60 day notice to let you give them directions for a direct transfer. But with only $500 sitting there, you didn't matter to them.

(If the 60 days have passed, you'll just claim this as an early withdrawal and owe a 10% penalty in addition to the regulars tax due. Note: the 20% was an estimated withholding. Your tax return with determine the correct amount.)

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    Try and get this done before the end of the year, that way it doesn't stretch across two different tax years. – mhoran_psprep Dec 18 '20 at 18:26
  • @mhoran_psprep - technically not necessary, but wise advice, if only to keep the paperwork simpler. I might edit into my answer when back at desktop. – JTP - Apologise to Monica Dec 18 '20 at 18:53
  • thanks! to be fair, TIAA may have sent a warning. – tim.farkas Dec 18 '20 at 21:57
  • @RonJohn - ha. Exactly. Thank you for the assist! – JTP - Apologise to Monica Dec 18 '20 at 21:59

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