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Get your taxes done using TurboTax
Yes, the earnings would be taxable in the conversions.
You will enter the recharacterization when you enter the contribution to the Roth IRA
- Open your return
- 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 $7,000
- Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount $7,000 (no earnings or losses)
- TurboTax will ask for an explanation statement where it should be stated that the original $7,000 plus $7,000 earnings were recharacterized.
- On the screen "Choose Not to Deduct IRA Contributions" answer "Yes"
To clarify, your 1099-R 2020 for the remove of excess contribution has only code J, correct?
No, if it has only code J in box 7 then the 1099-R 2020 will belong on your 2020 tax return and you won't need to amend your 2019 return.
- Open your return
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R” enter your 1099-R
To enter the 1099-R for the conversion:
- Open your return
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R” enter your 1099-R
- Click "Continue" and enter the information from your 1099-R
- Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
- Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
After you entered both 1099-Rs:
- On the "Your 1099-R Entries" screen click "continue"
- Answer "yes" to "Any nondeductible Contribution to your IRA?"
- Answer the questions about the basis and value
- Answer all Roth questions carefully
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March 16, 2021
10:24 AM
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