i contributed to a Roth IRA in February 2025 for 2025 tax year. When filing my taxes I realized afterwards that our MAGI was too high to be eligible for a roth. So, I filed an amended return, and had my brokerage recharacterize the IRA contribution (plus gains) to traditional IRA. This was not complete until April 17th. Is it correct to amend my 2025 return for the recharacterization? Will i be penalized because it happened after April 15th?
Posted by jobo1000
2 Comments
Technically yes. You may owe a penalty of 6% of the excess contribution. But maybe the IRS won’t be that strict and 17th is close enough to 15th for them to let it slide.
You are fine. You are technically supposed to enter a specific reason for the amended tax return, but that’s probably something you can clarify if you are ever asked.
>Generally, you can recharacterize (correct) an IRA contribution by making a trustee-to-trustee transfer from one IRA to another type of IRA. Trustee-to-trustee transfers are made directly between financial institutions or within the same financial institution. You must generally make the transfer by the due date of your return (including extensions) and reflect it on your return. However, if you timely filed your return without making the transfer, you can make the transfer within 6 months of the due date of your return, excluding extensions. If necessary, file an amended return reflecting the transfer (see Amending Form 8606, later). Enter “Filed pursuant to section 301.9100-2” on the amended return.
https://www.irs.gov/instructions/i8606#en_US_2023_publink25399ed0e836:~:text=Generally%2C%20you%20can,the%20amended%20return