I have a few thousands of dollars contributed to a Traditional IRA over 2016, 2017 and 2018. These contributions are post-taxed dollars and I have not deducted them from the IRA contributions (Since IRAs are meant for pre-tax contributions, I could have deducted taxes on my contributions but I did not).

Now, I have a few more days left for the end of the year and I'm considering rolling over the contributions from Traditional to a ROTH.

  1. Can I rollover all of the money (above $6000) from Traditional to ROTH and pay taxes on any grown that I have incurred since I've invested in to the IRA?
  2. Do the changes to the tax laws in 2018 have any effect on this?
  3. Also my original IRA contributions were made to an account managed by company X. I since rolled over to company Y (Not by choice but had to for other reasons). Does this have any affect on the rollover?

Also on here I see that recharacterizing is not possible once a rollover is made from Traditional and ROTH. This should have no affect on my roller plan right? I'm guessing that I cannot rollover the funds back to a Traditional IRA or another IRA after the initial rollover.

  • At the time, did you ask your bank to designate the IRA as a non-deductible one? Did the IRS make an adjustment to your 1040 for 2016 and 2017 giving you the IRA deduction? Commented Dec 26, 2018 at 21:35
  • Were you eligible to deduct these traditional IRA contributions, based on your annual income?
    – void_ptr
    Commented Dec 26, 2018 at 21:42
  • @Harper I do not remember requesting the bank to designate it as a non-deductible account. I haven't claimed a deduction and IRS has not made an adjustment for 2016 and 2017. Commented Dec 27, 2018 at 0:56
  • @void_ptr I don't believe I'm eligible to deduct these traditional IRA contributions based on my annual income. Commented Dec 27, 2018 at 0:56
  • Ah. Well that helps. Whenever I've done that, I've always put the money in cash equivalents and converted to Roth the very next day, so never had the interest factor to deal with. Commented Dec 27, 2018 at 1:33

1 Answer 1


The limit you see for the years 2016-2018 of 5.5K and 2019 of 6K is for new money into an IRA. This limit doesn't include transfers, conversions, or when people change their 401K from their former employer to an IRA.

If you can afford it, then converting all the IRA money to Roth IRA money in one transaction is the easiest. If you didn't take a deduction then anything above the amount you contributed is taxable on the conversion.

The question on timing is do you want to do it in 2018, and then settle up with the IRS in April 2019; or do you want to do it in 2019 and settle up with the IRS in April 2020. One reason to wait is that if the amount of money and taxes is significant then you might not have enough cash to pay the tax bill by April, or it could push you into a under-withholding situation. Waiting until January 2019 to make the conversion gives you more time to plan for the additional taxes.

There are some rollover rules you do have to consider:

  • As you mentioned the new tax law doesn't allow you to recharacterize.
  • It is far easier to do the conversion within the same company. That makes the tax paperwork easier, and makes sure you know when the conversion takes place.
  • If you are also changing companies then avoid the midair conversion. The mid-air makes the transfer and conversion one step. The problem is that the old company knows it was a traditional IRA and the new company knows it is a Roth. The paperwork is a nightmare, and neither company feels they need to help.

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