DanaB27
Expert Alumni

Get your taxes done using TurboTax

Yes, when you amend your 2020 tax return you will change the traditional contribution amount to $3,000 and will enter the $2,000 recharacterization when you enter the Roth IRA contribution. Yes, your basis at the end of 2020 will be $2,000, shown on line 14 of Form 8606. Please see the steps below:

 

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions”
  3. Click on “Jump to IRA contributions"
  4. Select “traditional IRA
  5. Select “Roth IRA
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution
  7. Enter the traditional contribution amount of $3,000
  8. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
  9. Continue until you get to the Roth IRA questions
  10. Answer “No” to “Is This a Repayment of a Retirement Distribution
  11. Enter the Roth contribution amount of $2,000
  12. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount of $2,000 (no earnings or losses)
  13. TurboTax will ask for an explanation statement where it should be stated that the original $2,000 plus $xxx.xx earnings (or loss) were recharacterized.
  14. 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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