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Here's what happened:

  • I made the maximum contribution to a Roth IRA this year.
  • I thought about how my marginal tax rate now is a lot higher than I expect it to be in retirement, so I decided a traditional IRA would have been a better idea.
  • I recharacterized this year's contributions to a traditional IRA.
  • I realized my income is too high to qualify for a traditional IRA deduction.

Here's what I did not do, and why this question is not a duplicate of similar questions already asked:

  • I have not made any conversions at all.
  • I have not taken any distributions, and thus have not received a 1099-R.
  • I did not previously go from a traditional to a Roth, and now want to go back to a traditional.
  • I am not rolling over any 401k or other non-IRA account.

Can IRA contributions be recharacterized multiple times seems like a good duplicate, but alas it's very old and has no answers.


My understanding is that (for married, filing jointly taxpayers for 2015) that someone with a MAGI above $118,000 is not eligible for a traditional IRA deduction. Below $183,000, the full Roth IRA contribution is still allowed.

I'm in this range (between $118,000 and $183,000), so a Roth IRA seems like the only rational choice. Please correct me if I'm wrong.

So, I would like to unrecharacterize (rerecharacterize?) this year's IRA contribution back to a Roth IRA. I've not yet filed a return for the contribution year, so I'm hoping I can do that.

Can I? Would I report to the IRA two recharacterizations? Or would I file as if no recharacterization ever happened?

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    You won't actually pay income taxes on it when you take it out - it'll count toward the 'basis' of the account, and so you'll only pay on the portion which is earned income above and beyond that basis. Unless you're at a higher income tax rate than the LT CG rate, that means you won't have any difference in taxes. – Joe Mar 16 '16 at 17:19
  • @Joe Very interesting...I wasn't aware of that rule. I guess that makes me feel a little less bad about my mistake. – Phil Frost Mar 16 '16 at 17:26
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    Either way, I would just talk to your custodian and see what they say. They should know what's possible to do; and more importantly, they should be able to tell you what forms they're going to give you as a result of your actions (both recharacterizations and conversions involve forms to the IRS). – Joe Mar 16 '16 at 21:09
  • @user102008 - I'm reopening, even thought my gut still says these overlap. No more comments regarding other question, just hoping this one will get the OP the straight answer he seeks. – JTP - Apologise to Monica Mar 17 '16 at 0:00
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I don't see any rule that you cannot recharacterize one way and recharacterize it again the other way. Since you are allowed to both recharacterize Traditional IRA contributions to Roth IRA contributions and vice versa, you should be able to combine them to go back to where you started.

When a contribution to one type of IRA is recharacterized to a contribution to another type of IRA, taxes are reported as if the contribution was originally made to the second IRA, and nothing was ever done with the first. So in your case, yes, you would report it as you would have with a Roth IRA contribution (which is what you originally did anyway). You would attach a statement explaining the two recharacterizations. You would also need to include the recharacterized amounts in line 15a on your 2015 Form 1040 if it happened during 2015 (but not if it happened during 2016). Form 8606 instructions pages 3-4 contains detailed information about what you need to do reporting-wise for each type of recharacterization.

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