Hello,
Here is my scenario:
1. Contributed to my Fidelity Traditional IRA in December 2022 to the tune of $7000 (which I eligible to contribute)
2. Initiated backdoor Roth IRA conversion in December; however Fidelity had completed the processing only in Jan of 2023
3. Fidelity had sent me Form 5498 depicting my contribution to Traditional IRA for 2022 and told me that they will send a 1099-R in 2023 since the Roth conversion only in Jan of 2023
While I started capturing this in my Turbotax, it showed a message that I need to recharacterize this before tax filing date since I am non-compliant (since I am not income eligible to contribute to Roth IRA) or otherwise I would be levied a penalty.
When I try to recharacterize the amount from Roth IRA to Traditional IRA to become compliant, Fidelity tells me that they can not recharacterize the amount converted into Roth IRA due to Tax Reform Act of 2018 and Roth conversion is permanent (i.e. it can not be moved to back to Traditional IRA). They also mentioned no financial institution will be able to do that either.
What are my options now? I'd really appreciate any guidance here.
Thanks in advance.
