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October 14, 2024
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How do I report a recent recharacterization of a roth ira contribution from march 2023 (that was counted towards our 2022 taxes)?

  • October 14, 2024
  • 2 replies
  • 0 views
Our joint income in 2022 and 2023 was too great to allow for roth ira contributions. We paid the 6% penalty in our 2022 taxes then forgot about the issue until recently. We recharacterized the contribution to a traditional IRA recently. How do I report the recharacterization in our 2023 taxes that are due on October 15th?
Best answer by dmertz

An excess Roth IRA contribution made in 2022 is not permitted to be recharacterized in 2024.

 

The only thing that I can see that could potentially be done in 2024 to correct the excess Roth IRA contribution from 2022 and move the money to a traditional IRA is to take a regular distribution equal to the amount of the excess Roth contribution and use that cash as you would any cash to make a regular traditional IRA contribution independent of the Roth IRA distribution.  However, this would not eliminate the excess and 6% penalty for 2023.  It would only eliminate the excess and penalty for 2024 and beyond.

2 replies

Employee
October 14, 2024
No text available
October 14, 2024

Thank you, I will check back later.

 

dmertzAnswer
Employee
October 15, 2024

An excess Roth IRA contribution made in 2022 is not permitted to be recharacterized in 2024.

 

The only thing that I can see that could potentially be done in 2024 to correct the excess Roth IRA contribution from 2022 and move the money to a traditional IRA is to take a regular distribution equal to the amount of the excess Roth contribution and use that cash as you would any cash to make a regular traditional IRA contribution independent of the Roth IRA distribution.  However, this would not eliminate the excess and 6% penalty for 2023.  It would only eliminate the excess and penalty for 2024 and beyond.