Return of Excess Question
Hello, I have a client who made a 2024 and 2025 Roth contribution for $8000.00. The client needs to remove the 2024 contribution as a return of excess and then they want to recharacterize the 2025 Roth contribution to a 2025 TIRA contribution. Does it matter which one happens first?
Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-24 16:35
No, this can be done in any order, but the removal should probably be done first, because if the 2024 contribution was made in 2024 any gain returned with the contribution will be taxable on the 2024 return, and it’s getting close to the filing date unless client intends to file an extension.