Convert Roth IRA back to traditional IRA

[Guest tmac]

Hello,

My parents opened a IRA for me when I was 18. Afer college, about 7 years ago, I converted the IRA to a Roth IRA. For the last 4 years I have not been able to contribute to the Roth IRA because I'm over the AGI limit.

My question is as follows. Can I convert my Roth IRA back to a traditional IRA so I can start contributing again?

Currently, the money is sitting in a SP500 Index Fund, and the only retirement account that I can contribute to is my 401K (maxed out each year). I figure if I can convert the Roth back to a traditional IRA then I can start contributing again to take advantage of the tax free returns and the compouding effect of having more money in the index fund. I also want to diversify the one index fund into a few more, but this only makes sense if I have more moeny to work with.

Any thoughts or suggestions are greatly appreciated. Thank you.

[John G]

Your Roth is "history" - it has nothing to do with your current ability to qualify for either a Roth or a regular IRA.

Qualification for the regular IRA or Roth is a function of three things for the specific tax year: (1) presence of earned income, (2) filing status {married filing separately for example} and (3) total adjusted gross income {because of phase outs and restrictions on some high income households}.

[txdd]

The period for recharacterizing your Roth conversion is long gone so you can't change your Roth to traditional.

If you have earned income (and are < 70), then you can always contribute to a traditional IRA. It's just the deductibility of your contributions that is income limited.

Also, traditional IRA returns are tax deferred, not tax free.