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Recharacterized roth into traditional IRA. Want to add another 6k and convert all to roth

I am in NY, with income now over roth contribution limit. 

 

In 2021 , I put 6000 to roth before my income went over limit. Then went over income limit and no longer qualify. In 2022 February, i recharacterized 5200 to traditional IRA (800$ loss).  I just filed 2021 taxes and included the recharacterization.

 

Now in 2022, I want to add another 6000 to traditional, and convert ALL (5200 from recharacterization + 6000 i put into traditional), into Roth.

 

Can I do this? If so How do I file this? Since 5200 is from recharacterization (and i filed this in 2021 taxes), and 6000 i want to do as part of 2022!. I want to do this before 5200 loses or gains money to maybe simplify my taxes?

 

Will I be taxed extra (its all post tax money technically...)

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3 Replies
FangxiaL
Expert Alumni

Recharacterized roth into traditional IRA. Want to add another 6k and convert all to roth

Yes, you can do this and you should not be taxed on the contributions because you did not and will not take the deductions. 

For the 2021 tax return, you made a $6k contribution to the traditional IRA (Roth IRA recharacterized to traditional IRA), and you can contribute $6 to your traditional IRA for the tax year 2022. You will enter on your 2022 tax return the $6k as a contribution to your IRA. Convert the traditional IRA to Roth IRA before you invest the fund(in the near future), you will receive a 1099-R form early next year and enter the form on your 2022 tax return. If you don't take the deduction of $6000 on your 2022 tax return, it should be a non-taxable event unless there are any earnings between now and the time you convert. 

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Recharacterized roth into traditional IRA. Want to add another 6k and convert all to roth

will the 1099-R be like 12000 since i'll be converting the 5200 sitting in my account from the recharacterization from 2021 tax year, and the new 6000 i contribute for 2022 will also be converted to roth? so in 2022 i will convert around 12000 to roth from my traditional account. 

dmertz
Level 15

Recharacterized roth into traditional IRA. Want to add another 6k and convert all to roth

Be aware that you recharacterized $6,000, not $5,200.  $5,200 is the loss-adjusted amount transferred, not the amount recharacterized.

 

Your 2021 Form 8606 will show $6,000 on line 14 that will carry forward to line 2 of your 2022 Form 8606 to be added to your nondeductible contribution shown on line 1 of the 2022 Form 8606.  This sum will be used in calculating the taxable amount of your 2022 Roth conversion.

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