Excess Roth contribution – Can transfer to IRA?
A client just contributed $8,000 for 2024 to her Roth rather than her IRA. Her income is too high for a Roth contribution. I know in the past that she could recharacterize the amount from her Roth to her IRA. Can that still be done?
Thanks as always …. Mary!
Permalink Submitted by Alan - IRA critic on Mon, 2024-07-15 13:30
Yes, it can either be recharacterized as a TIRA contribution, or if the contribution has lost money it could be returned net of the loss, and the full contribution could then be made to the TIRA.
That said, if her income is too high to deduct the TIRA contribution, perhaps she should just remove the Roth contribution and invest in taxable. If she already has a pre tax TIRA balance, doing a back door Roth (recharacterize to TIRA and then convert to Roth) would result in a mostly taxable conversion, and in that situation it is probably better to just have the excess returned and not recharacterized to a TIRA.