Retirement tax questions

Please be aware, for a backdoor Roth you want to make a conversion and not a recharacterization. Please verify that you selected conversion for moving the funds from the traditional IRA to Roth IRA.

If you recharacterized the traditional IRA contribution as a Roth IRA contribution then you will again have issues with excess contribution because of your MAGI limit.

Assuming you selected correctly conversion, you will first enter the $100 direct contribution to the traditional IRA and the recharacterization from Roth to traditional IRA on your 2022 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 “traditional IRA" and "Roth IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the traditional IRA contribution amount of $100
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?”
8. Answer “No” to “Is This a Repayment of a Retirement Distribution
9. Enter the Roth contribution amount of $4,600
10. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount of $4,600 (no earnings or losses)
11. TurboTax will ask for an explanation statement where it should be stated that the original $3,572 minus $1,028 loss were recharacterized.
12. 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)

You will have the 2022 Form 8606 with the basis on line 14. TurboTax will automatically carry it over to the next year.

Then next year you will get Form 1099-R for the conversion and since it happened in 2023 it will belong on your 2023 tax return next year when you file:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
5. On the "Review your 1099-R info" screen click "Continue"
6. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
7. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

Please see What's the difference between a conversion and a recharacterization? for additional information.

@aglow