I contributed traditional IRA (deductible) $5,500 in 2017 for tax year 2016. In December 2017, I converted to Roth IRA for all amount and the Bank already withheld tax (I found out that the Bank uses the money from traditional IRA to pay for withholding tax. So, the amount I have in Roth IRA is 5,004.35). I realized that doing this can step up my tax bracket. So, I would like to recharacterize to deductible IRA. Can I do it? What will the bank do with withholding tax? Will do they return withholding tax amount to traditional IRA?
