SusanY1
Expert Alumni

Retirement tax questions

If you prefer to leave it in the Roth, you can treat it as a conversion and pay the tax on the amount converted.  You can modify the 1099 in that case to make it work, and the IRS will be okay (after all, it correctly represents what happened and results in taxes due.)  

If you prefer to keep it in a traditional IRA you should contact your financial institution to see if they can make a correction for you.  Recharacterizations are no longer allowed, which is why you see the penalty in TurboTax. Your bank or brokerage firm may be able to make a change based on the error.  Whether or not they can do this will depend on the length of time since the mistake and the firm's policies.  You would request this from the firm that currently holds the assets.

While you could withdraw it all, you'd then also pay tax on the earnings, which would result in more tax without any real benefit that I can see.  

 

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