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Retirement tax questions
A couple of things... I previously eliminated some information to make it easier to follow and answer assuming it was a simple problem with a simple solution. I will now give a longer bit of information so that the details aren't conflicting...
Some time ago, I left a job and rolled my company 401k into an IRA. On 12/31/2019, that IRA had a balance... lets say $1M. I started a new job on 1/2/2020 and was able to roll backwards that IRA into my new companies 401k, so that in January 2020, that IRA had no balance.
Starting in 2015, my wife and I made regular monthly contribution to Roth IRA's (each).
In November or December of 2019, when I realized I would be getting an additional paycheck from my former employer I realized that I would make more than the Roth IRA contribution limit. Believing that time was of the essence, I calculated what I thought would be our total 2019 MAGI. My wife and I both did recharacterizations of some (bot not all) of our 2019 Roth IRA contributions as non-qualified traditional IRA contributions (about $2500 each). Because my wife's IRA had a balance of $0, she was able to immediately convert her non-qualified traditional IRA contribution to her Roth IRA. Because my traditional IRA had a balance of $1M, I would have had to apply the pro-rata to the conversion and opted to wait until 2020 to do the conversion... after rolling back my IRA to my new employers 401k.
In January 2020, I did the IRA rollback, and then did the conversion of my $2500 to my Roth IRA.
When I did my Taxes in February 2020, I discovered that I calculated my 2019 MAGI incorrectly back in November (I had forgotten that group life insurance is considered taxable income). I entered the information from the 2019 1099-R's for the recharacterizations done in 2019 on my 2019 taxes.
I calculated the additional 2019 Roth IRA contributions that would need to be recharacterized -- $298 for me, and $302 for my wife. I believe the instructions told me to enter these additional recharacterizations with my 2019 taxes, and I think TurboTax wouldn't let me continue until I "fixed" the excess 2019 Roth contributions. What I recall is that the calculations you do make it so the contribution never took place... or that the contribution was a non-qualified IRA contribution all along.
For 2020, I have 3 1099-R's. 1 for my IRA RollBack, 1 for my $298 recharacterization, and 1 that includes the money from 2019 that I didn't convert until 2020, the $298 and my 2020 backdoor Roth contributions ($2500 + $298 + $7000 = $9798). My wife has 2 1099-R's. 1 for her $302 recharacterization, and one that includes the $302 and her 2020 backdoor Roth contributions ($302 + $7000 = $7302).
Are you saying that neither of the 1099-R's for 2019 recharacterization ($298 and $302) should have been entered on our 2020 taxes? That they should only be applied to our amended 2019 taxes? If so... do I need to amend my 2019 taxes before doing my 2020 taxes so that the numbers I carry forward are correct?