If you contributed to a Roth IRA in 2020 but would like to be able to benefit from the traditional IRA deduction then you can recharacterize your 2020 contribution. You will have to contact your bank before April 15 and tell them you want to recharacterize your Roth contribution as a traditional IRA contribution.
Please be aware that the deduction of the traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Please see IRA deduction limits for details.
Please follow these steps to enter the recharacterization in TurboTax:
- Login to your TurboTax Account
- Click on the Search box on the top 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.
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