Recharacterize INTO a Roth IRA?

[Lusitan]

I searched the threads and saw some discussion about recharacterizing from a Roth into a regular IRA if it turns out you realize at tax time that you earned too much to qualify for a Roth.

Can a recharacterization work both ways?

I'm probably not going to qualify for a Roth IRA in 2008 due to income limits, but there's a chance that I might depending on how much freelance work my DW picks up and the size of my bonus this year. I'd like to invest some money now, and the safe bet would be to invest it in a traditional (and in this case, non-deductible IRA). If it turned out that for 2008 I snuck in under the Roth contribution limit, could I recharacterize this contribution into a Roth contribution instead?

Anyone every done that? How big of a PITA was it?

Thanks!

 

[FUEGO]

yes you can recharacterize like you are saying. For me at Vanguard, it is simple. A 3 (or so) page form to fill out and a brief letter of instruction that I recycle from year to year. The brokerage does all the work for you. Similar experience at Fidelity a few years ago. I recharacterize just about every year to optimize taxes. Usually I do this in early February after all the numbers are in but before I have to file. It only takes a week or so to complete at VG and Fido.

 

[crazy connie]

Or, take the procrastinaters way... Do it once all your tax stuff is in. I think that is legal... If not, I am sure someone will let me know here shortly!

 

[Lusitan]

Thanks guys!