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In 2018, I made a catch-up contribution($1000, nondeductible) to traditional IRA). Then by mistake, instead of Roth conversion, I accidentally requested "recharacterization to Roth" which I didn't notice until I got 1099-R recently. It shows distribution code "N".

Is $1000 considered as excess contribution because I'm not eligible to directly contribute to Roth? What are my options here to fix this?

  1. Recharacterize to traditional IRA again for 2018? how to report this? Does it mean I will have "basis" for tax reporting next year? Can I also withdraw it after re-recharactering to traditional IRA?

  2. Withdraw $1000+earning from Roth and pay income tax + 10% early withdraw penalty?

  3. Talk to my IRA custodian to see if they can change recharacterization to Roth conversion and resend me 1099-R? This would be my best scenario, but not sure if they can do it for me.

  4. Apply to next year's traditional IRA? But we already fully contributed to IRA for 2019 and all has been converted to Roth (backdoor Roth) for this year.

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You should be able to do #1 (recharacterize it again to a Traditional IRA contribution), and then, if you want, you can do the conversion to Roth IRA like you wanted to do but never did.

I am not sure whether they can do #3 (retroactively re-code it to a conversion), though I doubt it.

If you withdraw the excess contribution from your Roth IRA (#2), you would not pay tax or penalty on the contribution, only on the earnings part.

  • thanks for your input! – Jennifer P Mar 15 at 20:48

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