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  • Roth IRA Issue

    So I am an idiot and must have contributed directly to my Roth IRA by accident.  I talked to vanguard and they said after the funds arrive they can recharacterize it back to the Traditional and then I can covert.  Did anyone deal with this before?   Thanks for the help.

  • #2
    I’ve not done this but it happens not uncommonly. Perhaps more often not as a mistake. But someone thinks they’ll be able to make a direct Roth contribution. Then income rises or whatever. So they’re not eligible. No big deal. There is no reporting for the recharacterization I’m aware of. Fill out your 8606 as if the Roth contribution never happened.

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    • #3
      I almost did it on my wife's behalf yesterday. I can totally see how this might happen. Should be a minor hassle to fix. No long term repercussions, though.

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      • #4
        This is the same as making the mistake of having too much income.
        Recharacterize, convert, pay the tax on the extra.

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        • #5
          I spoke with vanguard again today and they were able to recharacterize it and it should be ready for me to convert Monday.  I was able to convert my wife's today without issues.

          I just have to say how easy and helpful the Vanguard reps were.  I was worried when I saw the banner over the contact info that said this time of year has high call volume and blah blah.  But they picked right up each time and it was very easy.

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