RaifH
Expert Alumni

Retirement tax questions

Yes, you can recharacterize your contribution. This changes the contribution from a Roth to a traditional IRA.

 

To do this, you will have to open a traditional IRA if you do not already have one, and as @dmertz said, notify your Roth administrator that the withdrawal is a recharacterization. You will receive a tax form for your 2022 taxes for the distribution from the Roth. If you are within the AGI limits or are not covered by a retirement plan at work, you may still take the deduction in 2021 for contributing to a traditional IRA.

 

If you just move it into a regular investment account, that would be treated as if you never made the contribution. You would also have to withdraw any earnings associated with the contribution, which your administrator should calculate for you. The earnings would be taxed as income in 2022.