ROTH IRA contribution into Traditional IRA

[cspyon]

Hi

I contributed $8000 to Roth IRA in Jan, 2024. 

Looking back,  I should have contributed that amount to the traditional IRA for the tax deduction benefits.

Can I withdraw $8000 from Roth IRA even now, and put it into my traditional IRA?

What do you think is my best strategy for my tax returns next year?

[Mike9241]

a ROTH IRA may be better in the long run because withdrawals never have to happen while you're alive.  if you do take withdrawals, they would be entirely tax free (over 59 1/2 and any Roth account in existence for 5 years). one would expect a person to be in a higher tax bracket when they do.

as to your question

• Account holders can withdraw their contributions without incurring taxes or penalties.
• People over age 59½ who've held their accounts for at least five years can withdraw income tax free

however, it's too late to make a Traditional IRA contribution for 2023 so I would leave the money in the ROTH to grow tax free.

This is a public forum so do not post any personal information. Without personal information no one can say whether a ROTH or Traditional IRA is better in the long run.  This is really a question for a financial advisor - even they will make assumptions that will not pan out. No one knowing what the tax laws will be when you retire is jusy one of the issues where assumptions are required,   

[fanfare]

A Roth contribution made in Jan '24 for 2024 can be recharacterized, up until the due date of your tax return which is April 15, 2025.

-

recharacterization: the original amount to the first IRA you report as contribution to the second IRA, earnings move but are ignored.
You must use a trustee-to-trustee transfer before the return due date .
You will have the trustee calculate the allocable earnings.

--

I agree with @Mike9241 

I very much regret putting so much into a Traditional IRA rather than a Roth IRA.

My financial situation now would be vastly different.

@cspyon 

-

.

[Opus 17]

There are two ways to do this.

1. Just withdraw the money as a regular withdrawal.  Withdrawals of contributions from a Roth IRA are tax-free and have no time limits.  Then, make an independent contribution to a pre-tax IRA.

2. You can recharacterize the Roth contribution as a deductible traditional IRA contribution.  This may require that the same bank/trustee hold the traditional IRA and the Roth IRA account.

The financial incentives are complicated.  You have the immediate tax deduction (withdrawals fully taxable in the future) compared with no deduction but the withdrawals are tax-free.  There are also some sound reasons to have your money spread out between Roth and traditional IRAs when you retire (not all in one kind or the other kind).

[dmertz]

"1. Just withdraw the money as a regular withdrawal.  Withdrawals of contributions from a Roth IRA are tax-free and have no time limits.  Then, make an independent contribution to a pre-tax IRA."

This doesn't negate the Roth IRA contribution.  If you just take a regular distribution of this $8,000 contribution made for 2024, you will still have already made the maximum $8,000 contribution for 2024 and you will not be eligible to contribute anything to a traditional IRA for 2024.

As Mike9241 suggests, for a majority of people the long-term tax savings resulting from eventual tax-free distribution of gains in the Roth IRA will be greater than any benefit from the tax deferral that you get with savings in a traditional IRA.