Actually it is simple.
a) In order to report the recharacterization, you must first enter it as a Roth contribution which is what you actually did. On the Roth IRA contribution screen right after you enter the amount of the Roth contribution, it will ask if you "Switched from a Roth to a Traditional IRA" - answer YES - that is telling TurboTax that it is a recharacterization. Then enter the amount recharactorized (I assume the same amount as the contribution). Then enter an explanation for the recharacterization.
b) The 8606 is only if the recharactorized Traditional IRA contribution either cannot be deducted because your MAGI is too high for a deduction or you choose in the contribution interview not to deduct it. If it is deductible then there will be no 8606 form and the deduction will go on line 32 on the 1040 form or line 17 on a 1040A.
c) The 1099-R that you will receive in 2017 will have a code "R" in box 7 that can be entered into TurboTax but will do absolutely nothing except to tell you to amend 2016 to report the recharacterization. Unfortunately the 1099-R interview only says to amend 2016 but does not tell you what to amend. Most people would think that they would just enter the 1099-R with the code R into 2016 - not so. If the code R 1099-R is entered into the 2016 TurboTax it will be ignored because the IRA contribution interview is the only way to report the recharacterization - which you will have already done with the explanation statement. The only purpose of the 1099-R is to inform the IRS of the recharacterization and it is information to you.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
