Please follow these steps to enter your recharacterization and make it nondeductible, do not enter anything under traditional IRA unless you made a direct contribution to it.
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"
- Deselect "Traditional IRA" to delete it
- Select “Roth IRA”
- Click "Continue" and confirm the deletion of your traditional IRA entry
- Answer “No” to “Is This a Repayment of a Retirement Distribution
- Enter the Roth contribution amount
- Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount (no earnings or losses)
- 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.
- On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (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 that your income is too high to deduct the contribution. This is what you want and the next screen will say $0 is deductible)
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