It depends on whether or not you’re changing account types with the rollover. For example, if you move funds from a traditional 401(k) to a Roth IRA—that’s called a Roth conversion—then you will owe taxes on the money after the transfer. And that could create a hefty tax bill!
But if you’re transferring money from a traditional 401(k) to a traditional IRA, then you won’t owe any taxes on that rollover. The same goes for a rollover from a Roth 401(k) to a Roth IRA (except for your employer’s contributions, which will be subject to taxes if you roll them into a Roth).
If you have questions about whether your 401(k) rollover counts as a “taxable event,” get in touch with a tax advisor.