"Did you make a contribution to traditional IRA in 2020" should this be "No". You will enter the Roth IRA contribution and during the interview select that you switched/ recharacterized the contribution.
- 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
- Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount (no earnings or losses)
- TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
- On the screen "Choose Not to Deduct IRA Contributions" answer "Yes"
"Value of all Traditional IRA as on Dec 2020"- zero is correct
Outstanding recharacterizations $6,000 is correct. Your tax amount went up because this affects the amount that is allocated as your basis for the 2020 conversion. Some of your basis is allocated to the 2020 conversion and some of the basis is allocated to future conversions/distributions (in your case it will be the 2021 conversion).
No, should not see 5590 added to your income. You stated you had $3,683 on line 18 (taxable amount) on Form 8606. This will show as taxable amount on line 4b of Form 1040 and be included in your taxable income. Next year on your 2021 tax return when you convert the balance of the traditional IRA only $4,093 will be tax free the rest will be included in your taxable income.
No, you do not need to create a 1099-R for the recharacterization. You will get a 2021 1099-R with code R and it belongs on the 2020 return. But a 1099-R with code R will do nothing to your return. Therefore, you can ignore it. You can only report a recharacterization as mentioned above.
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