Multiple recharacterizations?
Client made a 2015 Roth IRA contribution in Jan 2015 and then recharacterized to a traditional IRA in Sept 2015 thinking their income would be too high. Now having done their taxes they realize they are in fact eligible for a Roth IRA and they want to recharacterize again. Can you do this?
Permalink Submitted by Alan - IRA critic on Mon, 2016-04-04 20:31
No, a regular IRA contribution can only be recharacterized once. However, the client could request that the TIRA contribution be returned with any earnings, then a new Roth contribution made by 4/18. Any earnings returned with the TIRA contribution will be taxable on 2015 return and subject to penalty, so this is not quite as good as a recharacterization, but at least client will have a Roth contribution for 2015.