Retirement tax questions

You should have reported the recharacterization of the 2023 contribution on your 2023 return and made it nondeductible. Then you should have a 2023 Form 8606 with a basis on line 14 which will be entered on your 2024 return. 

If you didn't enter the recharacterization on your 2023 return then you will need to amend the 2023 return. Please see How do I amend my federal tax return for a prior year?

Note you do not need to enter the Form 1099-R with code R on your 2023 return since it doesn't make any changes on your 2023 return. You can only report the recharacterization with the steps below.

You will enter the recharacterization when you enter the contribution to the Roth IRA (on your 2023 and 2024 return):

1. Open your return
2. Click “Deductions &Credits” on the top
3. Click "I'll choose what to work on"
4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
5. Select “Roth IRA”
6. Answer ‘Yes” on the “Roth IRA Contribution” screen
7. Answer “No” to “Is This a Repayment of a Retirement Distribution
8. Enter the Roth contribution amount 
9. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
10. 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.
11. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes". If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible.

To report the conversion on your 2024 return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Click "I'll Type it Myself"
6. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
7. Click "Continue" and enter the information from your 1099-R for the conversion
8. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
9. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
10. On the "Your 1099-R Entries" screen add Form 1099-R with code N
11. On the "Your 1099-R Entries" screen click "continue"
12. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
13. Answer the questions about the basis from line 14 of your 2023 Form 8606 (should be $6,500) and the value of all traditional, SEP, and SIMPLE IRAs