One way to avoid paying taxes on your rollover IRA is to do a direct rollover. With a direct rollover, the money goes directly from your old 401k into your new IRA. This is the easiest way to avoid paying taxes on your rollover because you never actually receive the money. Another way to avoid paying taxes is to do what's called a 60-day rollover. With this method, you withdraw the money from your old 401k and deposit it into your new IRA within 60 days. The downside of this method is that you have to pay taxes on the withdrawal, but as long as you deposit the money into the new IRA within the 60 days, you won't be taxed on the rollover.