Article Date:
July 2018

Word Count:



Be Alert to the TCJA Tax Reform Attack on IRA Recharacterizations

When you convert a traditional IRA into a Roth IRA and then reverse the transaction by switching the account back to traditional IRA status, the reversal is called a recharacterization in IRS-speak.


If you had a sizable accumulation in your traditional IRA, the ability to convert that traditional IRA to a Roth IRA and also change your mind when things were backfiring was a terrific tax and financial planning break.


But if you make a Roth conversion transaction in 2018 and beyond, the Tax Cuts and Jobs Act (TCJA) eliminates your ability to recharacterize the account back to traditional IRA status.


And, unlike most of the TCJA changes that affect individual taxpayers, this one is permanent. But the new law still allows some IRA recharacterization transactions. Here’s what you need to know about what you can and can’t do with recharacterizations under ... Log in to view full article.

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