<prompt> Human: With a recent raise, Im hitting the MAGI cutoff for deducting traditional IRA contributions. Im also planning on using a Roth IRA to invest savings for a down payment for a house in five years previous post I already maxed out my traditional IRA for this year, so I would like to remove those contributions and transfer them to my new Roth IRA both Vanguard accounts. I know that I will have to remove the contributions and the earnings. How do I calculate that? Will Vanguard do that automatically? What other considerations do I need to be aware of?  <response>: Use recharacterize when you talk to Vanguard, not remove! Then the right process will happen.---See instructions for how you report the recharacterization in case 1 of this passage in Form 8606 instructions.You made a contribution to a traditional IRA and later recharacterized part or all of it in a trustee-to-trustee transfer to a Roth IRA. If you recharacterized only part of the contribution, report the nondeductible traditional IRA portion of the remaining contribution, if any, on Form 8606, Part I. If you recharacterized the entire contribution, do not report the contribution on Form 8606. In either case, attach a statement to your return explaining the recharacterization. If the recharacterization occurred in 2015, include the amount transferred from the traditional IRA on Form 1040, line 15a; Form 1040A, line 11a; or Form 1040NR, line 16a. If the recharacterization occurred in 2016, report the amount transferred only in the attached statement, and not on your 2015 or 2016 tax return.Change 2015 to 2016 and 2016 to 2017 as you read the above. You may find you do not file Form 8606, if you recharacterize all of your 2016 contribution as Roth.Vanguard should calculate the net income attributable to your contribution and transfer it over along with the contribution amount. See IRS Publication 590-A if you want the gory details. If your trad IRA was empty before you contributed to it, its easy. Otherwise the NIA computation essentially teases out of the growth that has been experienced by the IRA since the contribution happened, what portion was due to that contribution itself?Also, obviously, on Form 1040, you would not take the IRA deduction if you recharacterize all of the contribution. 