Retirement tax questions

Yes, if you plan to convert the amount in the traditional IRA to a Roth IRA (backdoor Roth) then should make the contribution nondeductible and file Form 8606 to report the basis. TurboTax will create Form 8606 when you make the contribution nondeductible.

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 “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount $6,000
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount $6,000 (no earnings or losses)
8. 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.
9. 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 and you only get a screen saying $0 is deductible)

Yes, you will get a 2021 1099-R  in 2022 with code R in box 7 and this belongs on the 2020 return. But a 1099-R with code R will do nothing to your return. You can report  the recharacterization only like mentioned above. Therefore, you can ignore the 1099-R when you get it in 2022.