@techie353 , since you appear to have provided conflicting information in your earlier posts, I'll summarize:
- You made a Roth IRA contribution in 2021 for 2021
- Your MAGI in 2021 was too high to permit a Roth IRA contribution
- You rolled your existing traditional IRA over to your Solo 401(k) in 2021, leaving you with a traditional IRA balance on December 31, 2021 of $0.
- You have requested a recharacterization of the Roth IRA contribution for 2021 to be a traditional IRA contribution instead.
Given these facts, this has nothing to do with a return of contribution, so any mentions in other replies here of code P on a Form 1099-R are incorrect. The original reply by @DanaB27 is correct as to how to enter the contribution and recharacterization into TurboTax although it's likely that your traditional IRA contribution will already be nondeductible in which case TurboTax won't ask if you want to make the contribution nondeductible. TurboTax will ask you to provide an explanation statement for the recharacterization.
You'll separately enter the Form 1099-R reporting the distribution from the traditional IRA that was rolled over to the Solo 401(k). If done as a direct rollover, this Form 1099-R will have code G in box 7 and will have the IRA/SEP/SIMPLE box marked. If you are using the online version of TurboTax you'll need to ignore the bogus message that online TurboTax generates that suggests that this rollover has anything to do with a Roth IRA; that's a bug in the online version of TurboTax.
When you receive the code R 2022 Form 1099-R next year you can ignore it. The explanation statement that you provide with your 2021 tax return takes its place.
Line 4a of your 2021 Form 1040 will show the amount of the rollover to the Solo 401(k), line 4b will show $0 and will have the word ROLLOVER next to the line. Your 2021 tax return will also include Form 8606 showing the nondeductible traditional IRA contribution that resulted from the recharacterization. The amount from line 14 of this form will carry forward to line 2 of your 2022 tax return when you prepare that a year from now.
