Recharacterization
Client made a Roth conversion in 2020. It has (now) come to light the client was “pushed” into a higher tax bracket due to the conversion.
I am aware that Roth conversion recharaterization is no longer an option.
I believe the client is stuck with the taxable income stemming from the conversion – are there any advanced strategies to defer the taxable income? I don’t think so but thought I would ask.
Thx
Permalink Submitted by Alan - IRA critic on Tue, 2021-02-23 15:59
Yes, client is stuck with the conversion income for 2020. But while the additional taxes due now may be regreted, there is also a good chance that once client reaches RMD age if not sooner, he will be happy that his RMDs will be lower at a time when his tax rates might well be higher.