Timing a Backdoor Roth and Recharacterizations

[desert_phoenix]

I would like to make my Roth IRA or backdoor Roth contribution for 2018 as soon as possible so the money is working for me longer.

I will make above the phase-out for Roth income this year if I get a raise in the 3rd quarter that is 50/50 on happening.

Is it better to just wait and see how the year actually goes and make the determination of the Roth versus backdoor Roth later and forego the intervening market time? 

Or can I do the process of a backdoor Roth now, and if it turns out I don't get the raise and my income stays below the start of the phase-out range ($120,000), it won't matter anyways because the TIRA money that I then used for the backdoor wasn't tax deductible to start with, and I was taxed when "converting" it? 

If that is not how it works, what happens if I do a backdoor Roth now, and then it turns out I only made $118,000 as an example?  Did I pay the taxes on the Roth money for no reason, or is it possible to recharacterize?

I do not have any money in a TIRA currently, so there wouldn't be any issues with taxes on those.  The TIRA I made would be exclusively for the purposes of then rolling the cash onward into my currently existing Roth.

I am just trying to weigh my preference (being in the market sooner) versus possible negative tax consequences.

Thanks!

[coachz]

https://onwallstreet.financial-planning.com/news/new-tax-bill-no-more-roth-ira-do-overs

[Caroline PF]

So, it sounds to me like you want the money to end up in a Roth IRA regardless of the pathway.

What I would do in your position, is contribute first to a traditional IRA. Then roll it over to a Roth IRA. You're not taxed until tax time next year.

If you make too much money, you will pay taxes on the non-deductible IRA, and then roll-over to Roth free of tax (excepting any growth prior to rolling over).

If you make less money, below the cut-offs, you will pay no tax for the traditional IRA, but then pay taxes on the roll-over.

Either way you will only be taxed once. Note that these are roll-overs, not recharacterizations.