1099-R 2a nonzero value

[tobyicnoise]

Hi all,

I contributed $6000 to my Roth IRA in 2021. 
I realized that my income changed in 2021 so that I did recharacterize/conversion this $6000 to traditional IRA in 2022.  

now I received two 1099-R

one for recharacterization with box2a is 0. The other one is for conversion with box2a with nonzero amount. (Same as gross distribution). 

After I did research and advice from here it seems that I need to fill out form 8606. 

Since this recharacterization/contribution was for 2021, I did contributed roth IRA in 2022. 

the received 1099-Rs were marked with 2022. 

When I tried to fill out 8606 form, it says I am maxed out because I recharacterized/contributed $6000 in 2022 (this supposed to be for 2021) and another $6000 roth IRA. 

Since the recharacterization/conversion is not really for 2022, thus if I am no to “Any nondedutible contribution to IRA?” Then I cannot have a chance to fill out 8606.  

The bottom line is that 1099-R box2a has nonzero amount and it is shown in 8606 form that I cannot change it. Thus this nonzero value is shown up in 1040 4b section. 

I am still confused. Thanks n

[DanaB27]

The recharacterization should have been reported on your 2021 tax return and you should have a 2021 Form 8606 with a basis on line 14 which will be entered on your 2022 tax return.

On your 2022 tax return, you will enter the 2022 Form 1099-R for the conversion in the retirement section (don't enter this in the IRA contribution section). If you made a direct IRA contribution for 2022 then you will enter it in the IRA contribution interview.

On your 2021 tax return, you should have entered:

You will enter the recharacterization when you enter the contribution to the Roth IRA 

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)

You will get the 2022 Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2021 and this belongs on the 2021 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore Form 1099-R with code R (don't need to enter it on your 2022 or 2021 tax return).

On your 2022 tax return to report the conversion Form 1099-R:

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
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 click "continue"
11. Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
12. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

On your 2022 tax return if you made an IRA contribution for 2022:

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”