Can I re-characterize the excess contribution of my Roth IRA to non-deductible, traditional IRA? But is there a restriction, like income limit, for this conversion?

[sallydog]

I already have a retirement plan through work, so cannot deduct the IRA amount, but can I still recharcterize the excess Roth IRA to nondeductible IRA?

[ChristinaS · Accepted solution]

As long as you have enough earned income, you can definitely recharacterize the Roth contribution to a Traditional IRA contribution, instead of withdrawing it altogether. However, if you also have a retirement plan at work, you may receive no deduction for this Traditional IRA contribution. Recharacterizing a contribution is not a conversion, and there's no income restriction for recharacterization. Any contribution can be recharacterized.

Keep in mind that you may benefit from then converting the Traditional IRA to a Roth. This is a good option if you have no existing Traditional IRA account. This will move the money into a Roth indirectly, which is where you may prefer to have it.

If you have a Traditional IRA account with a balance greater than $0 on 12/31/2017, your conversion to a Roth could be partially (or even mostly) taxable. The backdoor conversion is best for taxpayers who don't really have Traditional IRAs that are more than "shell" accounts.

**Also, even if you recharacterize to a Traditional IRA, any earnings since the contribution are taxable in 2016.