IRA conversion tax question

Submitted by Deborah Wachter on Tue, 2020-03-10 16:23

I want to convert money from my traditional IRA this month (March 2020) to put towards my Roth IRA for 2019, and put this conversion money towards the 2019 tax bill. Can I do this as long as it is done before the April tax deadline? I was told this is a characterization? Is this true? I did not make any contributions to the Roth last year. Please advise. thank you



Submitted by Alan - IRA critic on Tue, 2020-03-10 16:56

  • A conversion has no relation to a regular Roth contribution. A conversion is taxable income in the year converted, which cannot be 2019 at this point. Therefore, you can still make your regular Roth IRA contribution for 2019 up till 4/15/2020 regardless of the conversion. 
  • If you made a 2019 Roth contribution already, but your income is too high to qualify, a frequent strategy is to recharacterize (not “characterize”) that contribution to a TIRA contribution through the custodian. Then you can convert that TIRA contribution back to a Roth IRA, with taxes determined according to various rules. Not sure if that is why you mentioned “characterization”, which does not exist.

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