should I always recharacterize Roth contributions just before tax seas

[Guest andrewg]

I need to recharacterize my 1999 Roth IRA contributions to a tradition IRA account. Going forward, it occur to me that I will have a choice of contributing to a Roth or Regular IRA. Since I'm in a volatile trading business, I don't know exactly how much I'll earn in any year. Is it wise to simply contribute to a Roth IRA and then recharacterize it if I exceed the limit or are there hidden penalties for recharactizing Roth? aside from the paper work headaches - are there any other drawbacks doing this all the time?

Thanks

[BPickerCPA]

The only drawback is the paperwork. You can save yourself some computational headaches by putting the annual roth contribution into a brand new account. When you're sure that it can remain a roth, you can then transfer it to the existing roth.

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Barry Picker, CPA/PFS, CFP

New York, NY