Hello!
I need help with 1099-R for a recharacterization event done in 2021 for a 2020 AND that I may have accidentally filled a 8606 when I didn't need to for 2020.
For context:
While doing this year's taxes, I believed I have asked the right question to appropriately fill my 8606 form and ending with a total basis (line 14) of $0. See link for that discussion.
However, I believed I have filled my 2020's form 8606 completely wrong. In 2020, I found out too late that I no longer qualified for Roth IRA and I attempted to re-characterized. See the below chart for dates of execution:
However, when filling out my 2020 taxes, I was quite confused and thought I had a basis (I honestly did not know what I was doing then). This is what my 2020 8606 looked like:
Now using TurboTax2020 Premier (Mac), I am attempting to fix this. These are my steps. Would someone kindly help validate if they are done appropriately?
1. Selected 1099-R and entered my re-characterization form that I received in 2021.
2. Navigated to "Deductions and Credits" > "Update" (Button)
3. Searched for "Traditional and Roth IRA Contributions"
4. Selected both "Traditional IRA" and "Roth IRA"
5. Yes -> "Did you Contribute To a Traditional IRA?"
6. No -> "Is This a Repayment of a Retirement Distribution?"
7. "3000" -> "Your total 2020 traditional IRA contribution"
8. "3000" -> "Tell us how much of the above total contribution for 2020 you contributed between Jan 1, 2021 and May 17, 2021"
9. No -> "Did you change your mind?"
10. Yes -> "Retirement Plan Coverage?"
11. No -> "Any Excess IRA Contributions Before 2020?"
12. No -> "Any Nondeductible Contributions to Your IRA?" (Since I only started this for 2020)
13. "0" -> "Value of your Traditional IRAs on December 31, 2020"
14. Yes -> "Did you make a Roth IRA contribution for 2020?"
15. No -> "Is This a Repayment of a Retirement Distribution?"
16. "3000" -> "Enter Your Roth IRA Contributions"
17. Yes -> "Switch from a Roth To A Traditional IRA?"
18. "3000" -> "Tell Us How Much You Transferred"
19. Roth IRA Explanation Statement:
Date of the Original Contribution: 3/16/2020
Date of the Recharacterization: 02/09/2021
The Amount Recharacterized: $3000.
The Amount Transferred (Recharacterization plus earnings or losses): $4216.04
Reason for the Recharacterization: No longer qualified for Roth IRA
Unfortunately, I bumped into a strange error. It says my IRA contribution isn't permitted.
Also, line 14 in Form 8606-T shows a basis of $6,000. I was expecting "$0".
So from here,
1. Should I Import my 2020 W-2 then come back to this screen? (I sadly did lose my .tax2020 for importing, but have the .pdf).
2. Correct any steps from 1-19 from above? I am assuming I'm supposed to get "0" from line 14?
Thank you for your time and input!!!
Danny
