Recharacterization Qusestion
Hello, I have a client that made a recharacterization on 04/29/20 from their Traditional IRA to their Roth IRA. It turns out the client made too much money and now they need to recharacterize the contributions back into the Traditional IRA. Should this be done via a return of excess or can you actually recharacterize the 04/29/20 transaction? Any guidance would be greatly appreciated.
Thank you ,
Kevin
Permalink Submitted by Alan - IRA critic on Wed, 2020-05-13 14:47
Once a recharacterization of a regular contribution has been done, it cannot be re-recharacterized back. Therefore, a return of the excess Roth contribution +/- earnings must be done. A new 2019 TIRA contribution can be made up to 7/15/2020, but if client is a participant in a workplace retirement plan the contribution will be non deductible and should be reported on a 2019 Form 8606.