Change IRA contribution?
I contributed to a Traditional IRA for 2015 but there will be no tax deduction because I am over the MAGI. I should have deducted to a SEP IRA instead since I have both employee and self-employed income. Can I take out the contributions from the Traditional IRA and put them into the SEP IRA and make the contributions tax deductible for 2015?
Permalink Submitted by Alan - IRA critic on Sat, 2016-04-09 18:45
You can have your TIRA contribution returned to you with any allocated earnings and make a SEP contribution for 2015 as long as you contribute before 4/18 unless you file for an extension. You must calculate the allowed SEP contribution for 2015 as it might be more or less than the TIRA contribution limit. All SEP IRA contributions are deductible. Another option if your MAGI is not too high for it is to recharaterize the TIRA contribution as a Roth contribution and this option can be done with or without the SEP contribution. Note that you cannot directly recharacterize your TIRA contribution as a SEP contribution.