BUG REPORT: 2025 IRA Recharacterization incorrectly increasing MAGI/Tax Liability using 1040-X. Column A/Column C should be exactly the same. NOT user error. By the book.

[acudoc37]

The original Traditional IRA contributions were not deductible, and so Recharacterization with trustee-to-trustee transfer of contributions and Net Income Attributable do not change the tax liability, per IRS Reg. 1.408A-5. TurboTax software for 1040-X increased my MAGI and my tax. I was with an "Expert" for two hours this morning and it was useless. The bias is that the software is perfect and I must be doing something wrong. I assure you I have all my ducks in a row.

[acudoc37]

Diagnostic token 1336652, if I can get developers to look at why this is happening please.

[DianeW777]

After a second review here are the findings. First the recharacterization was removed to see the return before you added it, which did show the reason for the income increase.

Discovery is that before you recharacterized the Traditional IRA contribution you  had the basis on Form 8606 because it was nondeductible and it triggered part of the traditional IRA distribution (1099-R) not to be taxable on line 4 of Form 1040. Once the entry for the recharacterization was done on the amendment it became fully taxable. 

@acudoc37 

[Edited: 03/16/2026 | 10:14 AM PST]