RECHARACTERIZING ROTH IRA Contributions FOR MULTIPLE YEARS (2021 and 2022) part 2

Submitted by Darel Crosby on Thu, 2023-03-23 22:49

The Husband and Wife’s ROTH IRA Contributions for 2021 & 2022, which were made in 2022, were not Recharacterized correctly as we had requested in 2022. We asked for the ROTH IRA Contributions made in 2022 be Recharacterized as nondeductible TIRA contribution in 2022 so we could convert them to ROTH IRA’s, but the process was not completed. What is the best way to rectify this situation and possible still convert these 2021 and 2022 contributions made in 2022 to ROTH IRA contributions for the Husband and Wife?

If that is not possible what is the best way to maximize their ROTH IRA contributions, in all years (when over the normal income contribution limit), and what is the best way to prevent/fix this problem in the future?

When we asked for the 1099R coded R for 2021 and the 1099R coded N for 2022 from our firm, that is when we found out the ROTH Contributions Recharacterizations had not been completed correctly as requested in 2022.



Submitted by Alan - IRA critic on Thu, 2023-03-23 23:17

  • Did they do something else, or was nothing done at all with these contributions?  It’s too late to recharacterize 2021 which is likely now a 2021 excess contribution for 2 years, but the 2022 contribution can still be recharacterized.
  • Once this is fixed, in the future it is simpler to catch up and only make current year ND TIRA contributions, then convert them right away. This assumes no pre tax TIRA balances or the conversions would be taxable.

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