So I was doing my wife and I taxes this year and realized we/our financial advisors made a mistake.
We both opened new IRAs with financial advisors, transferred funds from older Roth IRA accounts and then we both contributed $7000 to our new Roth IRA, in November 2024. All seemed set and good till TurboTax informed me based on our income being above $240k, our Roth IRA contributions are excess contributions and will be taxed at 6%. From google it appears this penalty can be avoided by recharacterizing our Roth IRA contribution to traditional IRA contributions.
My question is say we each recharacterize the $7,000 to a traditional IRA contribution this week (feb 17th 2025), and then do a backdoor Roth next week (Feb 24th 2025):
1) its appears since we have not filed this is still allowed?
2) Will the bank who hosts our IRA generate the required documents (from google it appears from 1099-R and 5498?) intime for us to complete our 2024 Year taxes or how does that work from a tax reporting standpoint
3) How do I enter all this in Turbo Tax.
