Deductible traditional IRA convert to Roth IRA

Forum|Forum|5 years ago
March 14, 2021
2 replies
22 views

In Dec 2020, I made a contribution from my checking account to a deductible traditional IRA ($6k for 2020). I’m wondering, if I were to re-characterize this traditional IRA into a Roth prior to 4/15/2021, would it be taxed for 2020 or 2021? My 2020 and 2021 tax rates will likely be different, and while TurboTax allows me to include this in 2020, Fidelity (with whom I have my IRA) has said that if I were to re-characterize now it would belong in 2021 taxes.

macuser_22

Alumni - Champ

A recharactorization of a 2020 contribution is still a 2020 contribution treated as if the origination contribution had never happened and it was to the other IRA instead. It would no longer be deductible. There is no tax on a contribution. Now if you *convert* the Traditional IRA to a Roth in 2021, then that will be a taxable Traditional IRA distribution/conversion.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

ningzhu60Author

Level 2

Thank you very much for the quick response. I do see the distinction between conversion and recharacterization from Fidelity.

I misspoke on my original post, actually my IRA is with Merrill Edge, who does not seem to provide the option to recharacterize, only to convert. I will call them to ask.