Roth IRA conversions and recharacterizations

IRA owners may convert a traditional IRA to a Roth IRA under certain circumstances without any penalties.

Beginning in 2018, however, investors can no longer undo or “recharacterize” a contribution or a conversion to a Roth IRA, made after Dec. 31, 2017, and transfer money back to a traditional IRA account.

Please note that Form 1099-R combines all IRA distributions in 2019 attributable to a single mutual fund, including each Roth IRA conversion and any recharacterizations. In order to prepare your taxes, you will need to know what portion of that combined total represented each transaction. For a more detailed summary of your IRA account activity, please refer to your 2019 year-end account statement. If you need a copy of your 2019 year-end statement, please call the Shareholder Service Center at 800 523-1918 weekdays 8:30am through 6:00pm Eastern time.

For more help with Roth IRA conversions, please see IRS instructions for Form 8606.

The information contained in the Tax Center is not intended to be legal or tax advice. If you need assistance preparing your tax return, please consult a tax advisor.

Information may be abridged and therefore incomplete. Any discussion pertaining to taxes in this communication (including attachments) may be part of the promotion or marketing of a product. Advice (if any) related to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Individuals should seek advice based on their own particular circumstances from an independent tax advisor.