Roth IRA contribution re-characterization to Traditional IRA

[nkazi97]

I had a question about a particular circumstance. For 2022, say someone maxed out the Roth IRA contribution but is actually also eligible, based on the income limits, for a full $6,000 tax deduction for the Traditional IRA contribution. Can this original $6,000 contribution to the Roth IRA be re-classified to a Traditional IRA contribution for the same year (2022), without any tax implications (such as selling and withdrawing from Roth IRA)?

[MaryK4]

Yes, it would be a recharacterization- if it happens in the same year there are no tax consequences.   A recharacterization allows you to treat a regular contribution made to a Roth IRA or to a traditional IRA as having been made to the other type of IRA.

[nkazi97]

However, I did see this when researching further on how to re-characterize the Roth IRA contribution:

• Before the Tax Cuts and Jobs Act (TCJA) of 2017, you could recharacterize (or undo) a Roth IRA conversion back to a traditional IRA.
• Roth IRA conversions are now irrevocable, so you can no longer recharacterize a conversion.

So seems like it is no longer an option for moving from Roth IRA to Traditional IRA (even in the same year ex: 2022)? Or I am missing something here?

[MinhT1 · Accepted solution]

It is still possible to recharacterize a Roth IRA contribution to a Traditional IRA OR vice versa, by the due date of the tax return of the year the contribution was made.

The difference brought by the TCJA is that you can no longer recharacterize a conversion of a Traditional IRA to a Roth IRA , and a rollover from any other eligible retirement plan to a Roth IRA, made in tax years beginning after December 31, 2017.

Please read the instructions for form 8606, page 4 for more information,

[fanfare]

a conversion is not a contribution and vice versa.

people make this mistake on their tax return often.