DanaB27
Expert Alumni

Retirement tax questions

The earnings for a recharacterization aren't taxable income but the recharacterization should have been reported on your 2023 return with the steps below.

 

  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
  5. Answer ‘Yes” on the “Traditional IRA Contribution” screen
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution
  7. Enter the contribution amount 
  8. Answer “Yes” to the recharacterized question on the “Switch from a Traditional To a Roth IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
  9. 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.

 

TurboTax will include the explanation statement with your return. Please see How do I amend my federal tax return for a prior year?

 

 

You will use the same steps on your 2024 return to report the recharacterization you made in 2024.

 

Note,  Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore the 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.

 

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