Thanks a lot @dmertz for your response....it helped me understand what I should do next....
Just a few more Qs so that I can complete my tax filing for 2025 now that I know I can report the Conversion only in 2026...
I completed the Recharacterization from my Roth IRA to Traditional IRA after business hours yesterday, I believe it'll take a few days (or at least till Monday morning) for the funds to 'settle' (in-kind using Shares, not Cash) before I can initiate the Backdoor Conversion. This is the email that I had received from Fidelity:
"We received your request to recharacterize your Fidelity IRA contribution. Based on your request to recharacterize $8000 and applicable Internal Revenue Service (IRS) regulations:
- Your total applicable earnings or loss for the computation period was $698.73
- The total amount recharacterized was $8698.73"
With this information, can I complete my Tax filing for 2025 this weekend or should I wait for the fund to settle first in my Trad IRA account? I am assuming I can follow the instructions mentioned here using the same numbers from the Fidelity email:
https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-income/recharacterize-roth-ir...
So step 8 should be $8000 and Step 9 should be $8698.73, Is that a correct assumption? Which form will this generate in Turbo Tax? Is that 5498 or something else?
Then, I'll also complete "Step 1: Enter the Non-Deductible Contribution to a Traditional IRA" following:
https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-backdoor-roth-...
I believe this will generate form 8606.
Are these two steps good enough for filing taxes for 2025 as far as Roth Recharacterization is concerned? I'll focus on 'reporting' the 'Conversion for 2025' when I file taxes in 2026. After the dust settles on 2025 tax filing and if I end up doing a similar Backdoor Conversion this year for tax year 2026 itself (contribute to Trad IRA directly and then do a backdoor soon thereafter), will I then receive two separate 1099-R next year, one for 2025 and one for 2026?
