Yes, this is called a re-characterization and it will be done by your Brokerage firm. You will not receive any information regarding this re-characterization until next tax season as a 1099-R. For this year you will follow the steps below:
To report the recharactorization:
Enter IRA contributions here:
- Federal Taxes,>Deductions & Credits,>I’ll choose what I work on (if that screen comes up),>Retirement & Investments,>Traditional & Roth IRA contribution.
OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.
When you arrive to enter your Roth Contribution you will indicate that you changed your mind and moved it to a Traditional IRA (re-characterized) and if asked that you want it all to be non-deductible. The re-characterized amount would be that of the Roth contribution - not any earnings. Enter an explanation statement of the amount re-characterized and earnings if any. That will create a 8606 form that will track the non-deductible basis of the non-deductible contribution.
You should receive a 1099-R next year with a code "R" in box 7. That only reports the re-characterization to the IRS and is ignored if entered into TurboTax.
