Greenbeans wrote:To clarify, a backdoor conversion for 2012 must be completed by 12/31? I (wrongly?) assumed your contribution and conversion deadlines would be the same. Don't individuals on the margins need to compile their tax return in order to decide what type of IRA to contribute to or whether to undertake a conversion?
Yes, but you can convert before 12/31/12 and recharacterize the conversion up to the extended due date 10/15/13 if you converted too much (or for any other reason). Similarly, if you contribute to an IRA in 2012 for 2012, you can recharacterize the contribution to the other type of IRA by 10/15/13.
And this is necessary. If you contribute to a Roth IRA in 2012, you might discover, when you file your taxes, then you are not eligible for a Roth IRA because you are over the income limits. Therefore, you must be able to correct the Roth IRA contribution up to the last date for filing the 2012 taxes, which is 10/15/13 (if you have an extension). In order not to penalize taxpayers who didn't request an extension, the IRS allows you to recharacterize on an amended return through the extended due date as long as you filed on time.