Recharacterization of Roth IRA contributions to non-deductible traditional IRAs; I need help!

Forum|Forum|7 years ago
June 3, 2019
1 reply
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My wife and I contributed to our Roth IRAs in early 2016, BUT we exceeded income limits for that year. So, in March 2017, we recharacterized those contributions to non-deductible traditional IRAs. We filed Forms 8606 with our 2016 joint return along with info on the original contributions and recharacterization. Do we report any of this recharacterization info in our 2017 Turbotax return? I input one of the two 1099-R forms the custodian sent on these recharacterizations, and Turbotax is saying I may need to amend our 2016 return! Why?

Also, our original, early 2016, Roth contributions were both $6,500 (since we are over 55). However, the recharacterization amounts, or gross distributions in line 1 of the 1099-Rs from our custodian, are both over $6,500. Is this anything to be concerned with, as far as non-deductible IRA contribution limits? These recharacterized amounts were given in our 2016 return on an "additional information" page for the forms 8606. Thanks for any help!

TurboTax Premier Windows

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The system automatically generates the message that "you MAY have to amend your 2016 tax returns". From what you are saying, you do not need to amend your 2016 returns. You included the 8606 and contribution / recharacterization with that return. You are ahead of other tax filers who did not take care of this correctly.

The distributions on the 1099-R's will include earnings from each account as well as your contributions. It does not affect the IRA contribution limits.

Since you have reported your contribution amounts for recharacterization purposes, the earnings are just part of the distributions from the Roth's to the IRA's which must be reported by your financial company.

Anonymous

Answer

The distributions on the 1099-R's will include earnings from each account as well as your contributions. It does not affect the IRA contribution limits.

Coach209Author

Level 2

Thank you, TurboTaxLisaBr! From your answer, I suspect I do NOT need to address these recharacterizations in any way on my 2017 federal income tax return in TurboTax and I should NOT include the two 1099-Rs in what I input to TurboTax for 2017. Is this correct? Thanks again.