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Greetings, Jonpr, and welcome. You asked:

<<Last year we funded a traditional IRA for my wife with the full $2K. It turns out that when she worked as a temporary employee during the summer at a school, they held out 3% for a pension plan. Needless to say, we lost our $2K deduction.

My question is this. If we convert the traditional IRA to a ROTH IRA now (Feb. 2000) can she still make a $2000.00 contribution to her original IRA this year?>>

Yes, you can. Further, you may handle the issue of last year's contribution very simply and without incurring any income taxes on the earnings since that contribution. Simply contact your IRA provider and tell that agency you wish to recharacterize the original contribution as one made to a Roth IRA instead of one made to a traditional IRA. Tell them you wish the whole account as it now exists to be redesignated as a Roth IRA, and then follow their instructions for completing that action. As long as you do that by April 17, 2000, you will have no problem. And you may make a contribution to that IRA for this year as well. For details on recharacterization, see IRS Publication 590 (Individual Retirement Arrangements) available at

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