Amending 2020 Tax Return

Forum|Forum|4 years ago
February 23, 2022
11 replies
60 views

I had to recharacterize a Roth IRA contibution that I made in 2020 because my income for that year ended up too high to qualify to contribution to Roth. When I downloaded the 1099-R from the brokerage into Turbo Tax 2021, it told me that I may have to amend my tax return for 2020.

So I started amending that return in TurboTax 2020. When I got to the "Explain Your Recharacterization" page, I was surprised to see that all the information had already been filled in. The dates appeared to be correct, but neither the Amount Recharacterized nor the Transferred Amount matches the gross distribution in the 1099-R. Am I supposed to accept the pre-populated amounts, or am I supposed to change them?

If I'm supposed to change them, should Amount Recharacterized be the original amount that I contributed to the Roth IRA, i.e., 7K? And should the Transferred Amount be the gross distribution in the 1099-R?

When I tried just accepting the amounts as pre-entered, TurboTax 2020 told me there was no difference between my original return and the amended one.

DanaB27

Employee Tax Expert

Please be aware that, you can only report it as mentioned below. A 1099-R with code R will do nothing to your return. Therefore, you can ignore the 1099-R with code R. The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

You will enter the recharacterization when you enter the contribution to the Roth IRA

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “Roth IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution
Enter the Roth contribution amount of $7,000
Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount of $7,000 (no earnings or losses)
TurboTax will ask for an explanation statement where it should be stated that the original $7,000.00 plus $xxx.xx earnings (or loss) were recharacterized.
On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if you are thinking about doing a backdoor Roth. If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a screen saying $0 is deductible)

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jpalanca69Author

Level 2

Thank you for the response, but I'm still not clear on what I need to do.

After I entered "IRA Contributions" in the Search box, I don't see a "Jump to IRA Contributions" link or button. I just see a bunch of matching articles/posts.

Maybe this is because I'm using TurboTax Desktop instead of the online version?

ThomasM125

Level 15

In the desktop version of TurboTax, you need to start in the Deductions and Credits section, then choose Retirement and Investments, then Traditional and Roth IRA Contributions. Start or update the section and choose the Roth IRA option. Then, follow the instructions provided by @DanaB27

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