This question is not about recharacterizing a traditional to a Roth, nor is it about undoing a recharacterized Roth back to a traditional IRA.

If I opened an original Roth IRA account, can I recharacterize it as a traditional IRA? Seems like this shouldn't be a problem to do before annual tax return deadlines, but I have not seen this exact issue addressed much online.

The situation where this can be fruitful is where one exceeds the Roth income limit but wishes to take advantage of the "backdoor" Roth. By converting the Roth to a traditional, not taking any deduction for the contributions, and then later converting back to a Roth, it seems one can avoid the paperwork and minor penalties on gains of the Roth contributions. For example, the alternative is to "cancel" the Roth, pay minor penalties on the gains, open a new traditional IRA, fund it, then recharacterize the traditional to a Roth.

3 Answers 3


Yes, you can recharacterize your new Roth IRA (started in 2014) as a Traditional IRA by April 15, 2015. With recharacterization, the earnings within the Roth IRA get transferred over to the Traditional IRA. It is as if you started a Traditional IRA on the day that you made the first Roth IRA contribution i 2014. If you have already filed your 2014 tax return (and thus paid income tax on the money sent to the Roth IRA), you can file an amended return to claim whatever deduction you are entitled to on the Traditional IRA contribution. (High earners are not entitled to make deductible contributions to Traditional IRAs but can make nondeductible contributions. Be sure to file Form 8606 to tell the IRS that you have made a nondeductible contribution. Absent this, that money will be taxed again when it is taken out)

Do not "CANCEL" your Roth IRA, whatever that means. Re-characterize it, and soon, especially if your income is high enough that you are not entitled to contribute to a Roth IRA for 2014.


Dilip has already given the correct answer.

I wanted to add that there is a neat little trick you can do with Roth conversions (at least I think it's neat). This assumes you have already decided to do a Roth conversion:

  1. Perform the conversion as early in the year as possible.
  2. If the market does well, leave the conversion in place.
  3. If the market tanks or goes negative, re-characterize the Roth. You can always re-convert and re-characterize later.

This prevents you from paying taxes on the money lost on the market tanking.


  1. I convert a $10K IRA to Roth on January 1st.
  2. If the market goes up, I pay taxes on the $10K for the year of conversion.
  3. If the IRA loses value down to $8K, I re-characterize back to traditional. If I do so before the last day of the year, I can re-convert 30 days into the new year and try again.

My understanding is that you can do this on a per-fund basis, so if you don't mind the paperwork, you can create one Roth account per fund that you want to convert, keep all the winners as Roth and re-characterize all the losers.

  • Awesome. You just won moneySE for the day!
    – Rocky
    Apr 13, 2015 at 17:49

Yes, you can do that. What you describe (re-characterize the Roth IRA contribution as a Traditional IRA contribution, and then covert it to Roth IRA again) is exactly the recommended thing to do in the situation when someone belatedly discover that they are over the income limit for Roth IRAs. Basically, you are belatedly changing it to a backdoor Roth IRA contribution.

Note that since it is treated as if you originally made a Traditional IRA contribution, which could have been many months ago, and you are just now doing the Roth IRA conversion, there are probably earnings in the account, which will be treated as earnings in your Traditional IRA, which will be taxed on conversion. (If, on the other hand, you had done a backdoor Roth IRA contribution with little time between the contribution and conversion originally, none of these earnings would have been taxable.) So draw a lesson from this and preemptively do a backdoor in the future (assuming you can) just to be safe. There is no harm in doing the backdoor even if it turns out you don't need it.

  • Regarding taxes on gains, what if I file form 8606 as Dilip Sarwate states in the selected answer? Would this prevent me from being taxed on any gains made?
    – ybakos
    Apr 14, 2015 at 0:12
  • @ybakos: You are required to file Form 8606, and complete Part I, because you made a nondeductible Traditional IRA contribution. There is no other option. Then, for for conversion to Roth IRA, you will have to fill out Part II of Form 8606 for taxes for the year of the conversion. You will always have to pay taxes on the non-basis portion of the Traditional IRA during conversion in any case.
    – user102008
    Apr 14, 2015 at 0:16
  • Just to point out a minor matter. If one makes a nondeductible contribution to a Traditional IRA, it is not required that a Form 8606 be filed, but it is in one's best interest to do so. Absent this Form, the IRS position is that the entire contribution (not just the deductible portion) is from pretax money, and thus subject to income tax when a distribution is taken in later years. Ditto if the Traditional IRA is converted to a Roth IRA: if Form 8606 was not filed, tax must be paid on the entire amount of the conversion. File Form 8606 to establish the basis; it is better to do so. Apr 14, 2015 at 1:33
  • @DilipSarwate: Form 8606 instructions under "Who Must File?" says "File Form 8606 if any of the following apply. You made nondeductible contributions to a traditional IRA for 2014..." And then on page 6, "Penalty for Not Filing" it says "If you are required to file Form 8606 to report a nondeductible contribution to a traditional IRA for 2014, but do not do so, you must pay a $50 penalty, unless you can show reasonable cause."
    – user102008
    Apr 14, 2015 at 2:04
  • @user102008 This penalty must be something new. I had a friend (passed away some years ago) who made contributed to Traditional IRAs for many years when he was not entitled to make such contributions, and never deducted them on his returns, and nothing ever happened. The inherited IRAs are being treated as having zero basis. Apr 14, 2015 at 2:10

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