Time is running out to reverse a 2013 Roth conversion

August 25, 2014 Written by

You can reverse a 2013 Roth conversion if you act by October 15, 2014.

If you converted a regular IRA to a Roth IRA in 2013 and now want to switch back to a regular IRA, you have until October 15, 2014, to do so without penalty. The IRS calls reversing the transaction a “recharacterization.” A recharacterized conversion is treated as though it had not occurred. If done properly, there will be no tax due on the Roth rollover.

If you already filed your 2013 tax return and paid tax on the original conversion, you can still reverse the 2013 Roth conversion. After you reverse the Roth rollover, you must file an amended return to eliminate the tax bill on the conversion and receive a tax refund.

The IRA rules are very complex. If you would like more information about reversing your Roth conversion, please call us.



Written by: Doug Rodrigues