The $68k to $78k range is a phase-out. Below $68,000, your entire contribution is deductible (making it the pre-tax contribution most people are used to with traditional accounts). The portion of your contribution that is deductible phases out at incomes between $68,000 and $78,000. At incomes above $78,000, none of the contribution is deductible.

I haven't looked at the phase-out schedule specific to this scenario, but when I looked in regards to the phase-out of the LLC (Lifetime Learning Credit), it was proportional. The phase-out occurs over $10,000 dollars, so 10% or $1,000 above the minimum threshold would make 10% of the contribution non-deductible.

Again, this is only if your employer offers a company-sponsored retirement plan. The numbers are different otherwise.

That's good to know. Wouldn't have been as irritated had I known that portion of the account wouldn't be taxed. Won't be making this mistake again but at least now I can educate others.

I searched "recharacterize" and found the proper form. Thank you very much. Not a lot of money but it was irritating me that I was essentially locking it for 30 years without even receiving tax benefits.

I called them (Fidelity) before making this post, and they said I'd be able to fill out a return of excess form and choose my Roth as the receiving account. When I went to fill out the form, my retirement accounts were not actually an option for receipt of funds. Should I call back and request a "recharacterization" of the contribution? Because what you described is exactly what I was hoping was possible.