DanielV01
Expert Alumni

Retirement tax questions

You can, but you also have another option.  You may choose to recharacterize the excess contributions to a nondeductible Traditional IRA, and then immediately convert the nondeductible TIRA back into a Roth IRA.  Because of your income, you cannot directly contribute to a Roth IRA.  However, this technique is appropriately called a back-door Roth because it gets around the income limitations for making a direct contribution to a Roth in the first place.

There are no income limits for making a nondeductible TIRA contribution, and when you recharacterize your Roth contribution (you cannot recharacterize a Roth conversion), it treats the original Roth contribution as if it never happened, so you don't have an overcontribution penalty.  (Make sure that your plan administrator correctly reports this as a recharacterization in your records).  

conversion of a TIRA to a Roth is also not limited by your income.  By immediately converting the recharacterization of the Roth, you keep your Roth (but you will have more reporting).  This year, you will report the recharacterization as a nondeductible TIRA contribution so that you can report the basis on Form 8606 (which you will need next year), and in 2020 (for 2019's tax return), you will report the conversion.

This FAQ provides a little more information on how this will get reported next year:  https://ttlc.intuit.com/replies/6768029

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