I have only recently learned about Roth IRA's and would like to re-characterize my 2023 traditional IRA contribution of $7500 as a Roth IRA contribution instead. The $7500 was contributed into a Schwab traditional IRA in January 2023 and has made minimal gains since then. I checked with Schwab regarding a same-trustee transfer from traditional to Roth and they said they can process the transaction as an IRA recharacterization. I understand that 2023 federal and state income tax will be owed on the $7500 once it's recharacterized as a Roth. I know that we will have enough deductions and tax credits so that the additional $7500 won't make a significant difference, if any (perhaps a slightly smaller refund). However, I am concerned about unnecessarily complicating our 2023 taxes because of any possible gains (though with recent volatility I think those gains were minimal). Will we just need to file the Form 8606: Nondeductible IRAs when we file our taxes or is there something additional that will need to be completed due to the conversion? Can the regular Turbotax product handle this conversion or will I need additional help? I just want to make sure I'm not missing any crucial detail prior to completing this conversion. If it becomes too complicated, I will likely just wait until 2024 to open a Roth IRA rather than converting this year's contribution.
