Good Evening All,
I made a mistake in January 2022 and contributed to my Roth IRA which should have been a non deductible contribution to my regular IRA, due to income thresholds. I did not realize the error until March of 2023 (when I was preparing my 2023 taxes). I initiated a recharacterzation of the Roth IRA contribution (there was a loss) to a regular IRA. Once the characterization was finalized, I immediatly initiated a conversion of the (new) regular IRA funds to a Roth IRA (both the recharaterzation and conversion occurred in March of 2023).
I received two 1099-Rs, the first for the roth recharacterization to a regular IRA showing the gross distribution and coded ‘R’ in box 7. A second 1099-R for the (new) regular IRA conversion to a Roth IRA showing the gross distribution (box 1) and the taxable amount (box 2a.). Box 1 and box 2a. show the same number. Box 2b. notes both boxes are checked. Additionally, box 7 (distribution code) shows ‘2’ with the IRA/SEP/SIMPLE noted ‘X’. All of the above I understand and highly confident the 1099-Rs are correct.
Here's the problem I am struggling with. I have not contributed any more funds in 2023 to any IRA and dont plan to. Now, how do I deal with both 1099-Rs. I have read other posts and the different situations folks have gotten themselves in but can’t figure out what to do in mine. I have entered the conversion recharacterized contributions under the 'Deductions & Credits' section 'Retirement and Investments' as 2023 contributions. Under ‘Wages & Income’ section ‘Retirement Plans & Social Security’, I entered in only one of the 1099-Rs, the 1099-R relating to the newly established recharacterzation IRA in which the ‘2023 Form 5498 IRA Contribution Information’ shows the ‘Recharacterized contributions’. The second 1099-R is sitting here on the table and shows the ‘Roth IRA conversion amount’. Do I enter the second 1099-R into the ‘Wages & Income’ section ‘Retirement Plans & Social Security’? If I do, it shows on 1040 line 4a. double the amount of ‘IRA Distributions’.
