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I believe there is opportunity to contribute to an IRA up to April 2013 and have it count on tax year 2012. It wasn't clear from this question, so I'd like to ask specifically if it is possible to convert a traditional to ROTH in 2013 (prior to April) and have any of the money implications be felt in the 2012 return. There are multiple considerations here, as in income from the conversion as well as limits during the year. I'd like to know what all possible 2012 benefits I could see.

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  • My hope is that the income would count for 2012 and not 2013. After all, taxes are only going UP from here.
    – Captain Claptrap
    Commented Jan 7, 2013 at 14:17
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    By the way, the 2013 brackets have only gone up for those earning a bit over the top 1%. I'd bet you still can convert some funds this year and not be in a higher bracket.
    – JTP - Apologise to Monica ♦
    Commented Jan 7, 2013 at 18:29
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    If you recharacterize a 2012 (tax-deductible) Traditional IRA contribution as a 2012 Roth IRA contribution by April 15, 2013, your 2012 AGI will increase by the amount of the re-characterization. If you have deductible medical expenses (miscellaneous expenses) exceeding 7.5% (2%) of AGI, you will get to deduct less of them on Schedule A (if you are itemizing deductions) and so your taxable income will be even higher. Net effect: the tax due for 2012 will be more. Whether this is a (long-term and/or short-term) benefit to you or not is something that you need to decide for yourself.
    – Dilip Sarwate
    Commented Jan 7, 2013 at 20:47

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No, sorry. You can deposit to an IRA in '13 but designate for '12 until 4/15.

You have until the tax return due date (including the extension to 10/15) to recharacterize conversions made in 2012.

Conversions done after 12/31/12 are considered 2013 conversions. (And to the future reader - please add 'up till 12/31/13', obviously)

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    I believe it is also possible to recharacterize contributions (not just conversions) made in a calendar year until the due date of the tax return for that year, for example, to have started off a new Roth IRA in one year and then recharacterize it as a Traditional IRA in the first part of the next year when the tax return shows that the requirements for contributing to a Roth IRA have not been met (e.g. AGI too high).
    – Dilip Sarwate
    Commented Jan 7, 2013 at 17:58
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    @DilipSarwate - Nice catch! Right. One might deposit, but after year end find they weren't permitted to do so. I appreciate the note.
    – JTP - Apologise to Monica ♦
    Commented Jan 7, 2013 at 18:01

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