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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