How Roth IRA Recharacterization Can Reverse a Conversion

Episode 51 of Roth IRA with Fexingo tackles Roth IRA recharacterization — the underused IRS rule that lets you undo a Roth conversion after the fact. Lucas and Luna walk through a concrete case: a married couple in the 24% bracket who converted $50,000 in January, then saw their income spike from a surprise bonus and capital gains. With the 2026 tax brackets and the TCJA sunset, the conversion pushed them into the 32% bracket unexpectedly. The hosts explain how recharacterization works, the October 15 deadline, the one-per-year limit, and why it is not a do-over for market losses — just for taxes. They also cover the 'recharacterization then reconvert' strategy and why most brokerages do not advertise it. Perfect for retirees, side-hustlers, and anyone doing backdoor or mega-backdoor Roth conversions who wants a safety valve. #RothIRA #RothConversion #Recharacterization #IRS #TaxPlanning #Retirement #RetirementPlanning #BackdoorRoth #MegaBackdoorRoth #TaxBrackets #TCJA #TaxStrategy #Finance #Investing #PersonalFinance #FexingoBusiness #BusinessPodcast #TaxFreeRetirement Keep every episode free: buymeacoffee.com/fexingo