Retirement tax questions

1) No do not add code P to the 1099-R with code J.  On your 2019 return you will have to enter the Roth contribution and if you are not eligible for the Roth contribution because of your MAGI then it will trigger the 6% penalty.  You will only have to pay the penalty for 2019 since you withdrew the excess contribution in 2020.

2)Yes, you will have to amend your 2019 return to add the penalty and Form 5329. Please see How do I amend a 2019 return in TurboTax?

3) Please follow these steps to enter the recharacterization on you 2020 return:

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 “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount of $6,000
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount of $6,000 (no earnings or losses)
8. TurboTax will ask for an explanation statement where it should be stated that the original $6,000 plus $100 earnings were recharacterized.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes"

In regards to the $100 gain before you recharacterized the contribution there is no tax or penalty on the earnings since the earning will be simply switched into the traditional IRA account.

For the 1099-R in regards to the conversion please follow these steps:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R”
4. Click "Continue" and enter the information from your 1099-R
5. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
6. On the "Your 1099-R Entries" screen click "continue"
7. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
8. Answer the questions about the basis

The $200 gain when you converted the funds to the Roth IRA it will be included in your taxable income. The rest of the conversion won't be included in your taxable income. You can verify your entry on line 4 of Form 1040.