Retirement tax questions

A Form 1099-R for recharacterization should have code R in box 7 and shouldn't have any income tax withheld. A recharacterized IRA contribution made for 2021 belongs on the 2021 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned below. Therefore, you do not enter a Form 1099-R with code R. 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 must be zero.

If your Form 1099-R doesn't have code R in box 7, can you provide more details on what code is listed in box 7? Does it show taxes withheld?

You should have entered the recharacterization when you enter the 2021 contribution to the Roth IRA on your 2021 tax return:

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 automatically and you only get a warning and then a screen saying $0 is deductible)