Steps for filing amended return for IRA recharacterization that was done after filing tax return.

[vmarwah]

I contributed $5500 to Traditional IRA in Jan 2017 and converted $8500 from Traditional IRA to Roth IRA in March 2017. In January of 2018 I contributed another $5500 to Traditional IRA and convered to Roth IRA. In April of 2018 I filed my taxes on time and filed in all that. 

Fast forward few months and had significant loss in Roth IRA. I know I cant recharacterize my 2018 conversion but I can recharacterize my 2017 conversion back to Traditional IRA. When I put in all this info in Turbo Tax it tells me I need to amend my 2017 returns - which makes sense since I did recharacterization after filing my 2017 tax return. From my broker I got 2 1099-R - one for 2018 conversion and another one from recharacterization with distribution code "R".

My question is how do I go about this amended return. If I open turbo tax for 2017 and try to file my amended return for that - what do I actually amend. Do I have to file the whole return again or I only amend the IRA document and send that in to the IRS. What would be the steps for doing this - Do I delete 1099-R in my 2017 return that shows $8500 conversion and enter new one that I just received or need to take some other steps.

Thanks a lot for help

[dmertz]

You'll use 2017 TurboTax to amend your 2017 tax return.  Since you appear to be using the CD/download version of TurboTax, make a copy of your originally filed tax file and then begin the amendment using this tax file.  You'll need to revisit Personal Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R), edit the original Form 1099-R reporting the Roth conversion and in the follow-up to that entry indicate the amount of the original conversion that you recharacterized.  TurboTax should prompt for an explanation statement where you'll again indicate the amount recharacterized and the adjusted amount transferred back to the traditional IRA (from box 1 of the code R 2018 Form 1099-R.  You can enter the code R 2018 Form 1099-R into 2017 TurboTax, but 2017 TurboTax will essentially ignore it.

To amend your 2017 tax return:

https://ttlc.intuit.com/replies/3288565

[2010wangtax]

Could you please provide a response to the question "Do I have to file the whole return again or I only amend the IRA document and send that in to the IRS"?

[dmertz]

If your 2017 tax return was filed showing the Roth conversion on Form 8606  Part II, your amendment must include the corrected Form 8606 to showing zeros in Part II in place of the original dollar amounts and Form 1040X to show the change in AGI.  TurboTax won't generate Form 8606 with all zeros in Part II, so you'll need to manually prepare the corrected form.

[2010wangtax]

Thank you!

[vmarwah]

Thanks for letting me know this. Just a quick follow-up:

So I see the old 1099-R and 8606 with $8500 in part II. I opened the 1099-R and made the changes based on new 1099-R which shows the new gross distribution in box 1. Code is R and no other box has any info or selected. After answering the questions I was able to add the explanation. It now shows the refund that I am supposed to get. But when I go to forms, I dont see 8606 anymore. I know you said that I will manually have to 0 out part II - but am I supposed to see the form in turbo tax or just go to IRS website and print the form and include with 1040x? Also will I be using 2017 8606 or 2018 8606 from IRS website.

Because it took this amount out of my income, it lowered my income to the point I am getting $400 qualified retirement contribution credit. Am I supposed to do anything special for that and include form 8880 showing this credit as well?

Also when I save the amended return - it is saving all the forms again - 1040, schedule A, retirement contributions, schedule d, business, etc. I am just supposed to send in 1040x and 8606 and not send the other forms since nothing changed.

Also - my itemized deductions increased by like $150 - am I supposed to include Schedule A for that?

Finally - it updated my refund for NY state along with it. Am I supposed to do anything special for NY state?

Thanks a lot for all your help with this.

[dmertz]

You'll either need to download a fillable Form 8606 from the IRS website or you can prepare one in a separate TurboTax tax file using forms mode and overrides.  It cannot be prepared in your amended tax file.

Since you are now eligible for the Retirement Savings Contributions Credit, you'll need to include the Form 8880 with your amendment.  TurboTax will already have included the resulting credit on Form 1040X, so your amendment needs the Form 8880 to support that change.  Similarly, You'll need to include the changed Schedule A.  Basically, any form that has changed needs to be included in your mailing (except Form 1040 since Form 1040X takes its place).

Your NY state tax return will need to be similarly amended.  I'm not familiar with the details of amending a NY state tax return.

[vmarwah]

Thanks for providing with all the steps. I have pretty much done it all - but cant get new 8606 from turbo tax because if its 0 if excludes from the return (I started new return). You aid I can get fillable 8606 from IRS website - I am just able to get the download version. I cant find fillable. Can you point me where I can get that.

Also - Form 8606 will have to be for 2017, right? I cant use 2018 version.

[fanfare]

did you save 8606 and open it with Adobe Reader ?

[dmertz]

The download version of Form 8606 from the IRS *is* the fillable form.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f8606.pdf">https://www.irs.gov/pub/irs-pdf/f8606.pdf</a>

[vmarwah]

I cant believe thats how easy the solution was - I have been scratching my head for so long trying to find a fillable version online.