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Retirement tax questions
No, you were correct to answer "no" to the question "did you have any excess contributions" since you removed the excess contribution plus earnings in time.
You will have to amend your 2020 tax return to include both 2021 Form 1099-Rs with codes J and P. Please see How do I amend my 2020 return?
- Click on the "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Enter your 1099-R
- Click "Continue"
- On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
- Add the second 1099-R with the same steps
- Click "Continue" after all 1099-R are entered and answer all the questions.
- Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")
The 2021 Form 1099-R with code N belongs on the 2021 tax return:
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
But you will also have to report the recharacterization in the IRA contribution section. You will enter the recharacterization when you enter the contribution to the Roth IRA:
- Login to your TurboTax Account
- Click on "Search" on the top right 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 of $6,000
- 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)
- TurboTax will ask for an explanation statement where it should be stated that the original $6,000 plus $302.83 earnings were recharacterized.
- 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 automatically and you only get a warning and then a screen saying $0 is deductible)
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March 20, 2022
5:07 AM