Convert Roth IRA into IRA?

[Ichinco]

I fully funded my 2020 Roth IRA and just noticed that my MAGI for 2020 was above the contribution limit. Since I wasn't allowed to put any money into Roth IRA what do I do now? Should I convert the Roth IRA into a traditional IRA?

Any suggestions appreciated. TY

[LinaJ2020]

Yes, that would be an option.  You might also want to consult your financial adviser seeking for other alternatives.

A back door Roth is a term used to describe a method of funding a Roth IRA when your modified adjusted gross income (MAGI) is too high to allow you to directly contribute to a Roth IRA.  A back door Roth consists of opening a Traditional IRA and making a fully non-deductible contribution to the Traditional IRA.  The Traditional IRA can then be converted to a Roth IRA without any income limitations or restrictions on your MAGI. 

Additionally, the funds you put into the Roth are considered converted funds, not contributions. That means you have to wait five years to have penalty-free access to your funds if you’re under the age of 59½.3 In this sense, they differ from regular Roth IRA contributions, which you can withdraw at any time without taxes or penalties.

A backdoor Roth IRA lets you get around these limits:

• Roth IRA income limits: For 2021, if your modified adjusted gross income (MAGI) is higher than $140,000 if you're single ($139,000 for 2020) or $208,000 if you're married filing jointly ($206,000 for 2020) or qualifying widow or widower, you can’t contribute to a Roth IRA.3 These limits don’t apply to Roth IRA backdoor conversions.
• Roth IRA contribution limits: For 2020 and 2021, you can contribute $6,000 each year ($7,000, if you are age 50 or over) to a Roth IRA.3 With a backdoor Roth IRA conversion, these limits don’t apply.