Retirement tax questions

You do not create a 1099-R since you recharacterized the 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 “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount 
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount (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)

In 2022 you will get a 2021 1099-R with code R-Recharacterized IRA contribution made for 2020  for the recharacterization and this belongs on the 2020 return. But a 1099-R with code R will do nothing to your return. The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a will be zero. You can only report the recharacterization as mentioned above. You can ignore the 2021 1099-R with code R when you get it in 2022.

Please delete the 1099-R you created:

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R”
3. Delete the 1099-R