All Forum Posts by: M Piccininno

@Todd Goedeke is correct.  Contact your Solo 401k provider and ask them about a direct rollover to an IRA. You will want to open your IRA account prior to doing this. Ensure that your Solo 401k provider will not issue the check payable to you as this would constitute a distribution and be subject to the mandatory 20% federal withholding. The check should be made payable to the custodian of your IRA (i.e. the company where you set up your IRA Account). You will not need to endorse the check.

You can find confirmation of what I am writing directly on the IRS website. They have a search box in the upper right where you can enter "Rollovers of Retirement Plan and IRA Distributions." Select the first link that comes up from your search. Contents read as follows:

How Do I Complete a Rollover?

1. Direct rollover – If you’re getting a distribution from a retirement plan, you can ask your plan administrator to make the payment directly to another retirement plan or to an IRA. Contact your plan administrator for instructions. The administrator may issue your distribution in the form of a check made payable to your new account. No taxes will be withheld from your transfer amount.
2. Trustee-to-trustee transfer – If you’re getting a distribution from an IRA, you can ask the financial institution holding your IRA to make the payment directly from your IRA to another IRA or to a retirement plan. No taxes will be withheld from your transfer amount.
3. 60-day rollover – If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it in an IRA or a retirement plan within 60 days. Taxes will be withheld from a distribution from a retirement plan (see below), so you’ll have to use other funds to roll over the full amount of the distribution.

Be sure to request what is listed as option #1 on the IRS website where they indicate no taxes will be withheld.  Be sure your Solo 401k provider does not do option #3, as the 20% mandatory withholding will apply under that option as mentioned by @Scott Smith because you are rolling over the funds later instead of directly. 

Once the funds from your Solo 401k are directly rolled over to an IRA in your name, you can subsequently request a distribution and specify your federal tax withholding.