Deductions & credits

The 2022 contribution cannot be recharacterized since it is after the due date. To avoid the 6% penalty for 2024 you will have to withdraw the excess contribution (without earnings and losses) by December 31, 2024. Please request a regular distribution.

You will have to pay the 6% penalty on your 2022 and 2023 tax return for the 2022 excess contribution. You enter the Roth IRA contribution on your 2022 tax return and TurboTax will calculate the penalty on Form 5329. Please see How do I amend my federal tax return for a prior year?

On the 2023 you will enter the excess contribution from prior years and TurboTax will calculate the penalty on Form 5329:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2022

You will repeat the steps on your 2024 return and the excess contribution will resolve on your 2024 return when you enter the 2024 Form 1099-R with code J (assuming you are under 59 1/2) for the withdrawal of the 2022 excess contribution. 

No, you won't pay the 6% penalty on the 2023 excess contribution if you recharacterize the 2023 Roth IRA contribution as a traditional IRA contribution.

You will enter the recharacterization when you enter the contribution to the Roth IRA 

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 “Roth IRA”
5. Answer ‘Yes” on the “Roth IRA Contribution” screen
6. Answer “No” to “Is This a Repayment of a Retirement Distribution
7. Enter the Roth contribution amount 
8. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
9. 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.
10. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" if you are thinking about doing a backdoor Roth. Otherwise select "No". (If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible)

You will get a 2024 Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2023 and this belongs on the 2023 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore the Form 1099-R with code R when you get it in 2025.

Please be aware, you won't be double taxed. When you recharacterize the Roth IRA contribution as traditional IRA contribution you might be able to deduct the traditional IRA contribution. If you cannot deduct the contribution because of a work retirement plan and your income then you will have a basis that will be reported on Form 8606. When you take distributions then the part allocated to the basis will be non-taxable .

Please see What happens if I made an excess Roth IRA contribution for additional information.