Error in Roth conversion

In an attempt to do a backdoor Roth IRA two days ago, I discovered today I made a huge error.
I have been doing a backdoor Roth IRA for few years with vanguard.

Last year I did a roll over from my previous employers 403b plan, and had the money in my vanguard traditional Ira

Last week I contributed $6000 to my traditional Ira.
This week when I went to convert the money from traditional to Roth, I made an error and converted the entire amount in my traditional Ira. ($350k).

Please advise on what I can do to reverse this.



If the error was yours and yours alone, nothing can be done to reverse this because Roth conversions can no longer be recharacterized back to a traditional IRA.  On the plus side, eventual tax-free growth in the Roth IRA will somewhat offset paying the taxes at a higher tax rate now.

As DMx indicated, the former recharacterization solution for this disappeared 4 years ago. If you were responsible for this error, the only possible solution is filing for a letter ruling, but that will set you back around 20k and to even consider pursuing that solution, a review of recent IRS rulings on this matter would be needed to determine what types of circumstances the IRS would consider before allowing a retroactive recharacterization. I haven’t heard of the IRS approving such a request, but that does not mean that they haven’t approved any at all. That said, you would likely have to show that the error was due to something more than just carelessness, not understanding the pro rate rules for IRA distributions and conversions, forgetting you did the 403b rollover, etc. If there isn’t more to your conversion execution than these stated reasons, spending 20k and going through a year or more of uncertainty and IRS tax bills would just make the situation worse. If you can determine that the IRS offers leniency to some degree, it might be worth the effort since 350k of taxable income will produce a serious tax bill that perhaps you cannot even pay off with an installment agreement.

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