Question

which of the following is true. a Roth recharacterization of a converted tradition IRA

is no longer permitted

is not permitted before December 31, 2020

may be done any time before December 31, 2021

may be done at any time

Answer 1

Each year, you have the opportunity to recharacterize the current year's IRA contributions from a traditional IRA to a Roth IRA, or vice versa. This recharacterization must be done before that year's individual income tax deadline.we appear to be in a slow recovery from a relative bottom in the 2020 COVID Bear Market. However, back during the decline I authored the article, “Roth Conversions are More Valuable During Bear Markets.” Many of our readers reached out excited and eager to convert while the market is down. A handful of others reached out wishing they had waited to convert until later and wondering what can be done.

While the much-delayed 2019 tax-filing deadline (July 15, 2020) has now passed, it's still not too late to recharacterize your 2019 IRA contribution. The deadline for recharacterizing a 2019 tax year contribution is October 15, 2020 for taxpayers who timely file their 2019 federal income tax returns