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Level 2
posted Apr 14, 2025 5:18:19 PM

Help with recharacterization...

In January 2024 I mistakenly put $2000 (after tax) in my Roth when I meant to put it in Traditional.  I found my mistake in Sept 2024.  Vanguard recharacterized the $2000 plus $309 in earnings back to my Traditional, and I subsequently did a backdoor Roth, which left $0.00 in my Traditional.   When I enter my 1099-R, Turbotax doesn't give me the optional to declare a (Backdoor) Roth contribution, create form 8606, and it puts $2309 in 1040 box 4a and 0.00 in box 4b.

 

The $2000 is post-tax that I put in my Roth and I want to pay the tax on the$309... what do I do?

The Distribution Code is 'N'

 

Thanks

0 1 1281
1 Replies
Expert Alumni
Apr 15, 2025 12:58:17 PM

Please follow the steps below to enter your recharacterization in the IRA contribution interview. You will enter the recharacterization when you enter the contribution to the Roth IRA:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “Roth IRA”
  5. Answer ‘Yes” on the “Roth IRA Contribution” screen
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution
  7. Enter the Roth contribution amount of $2,000
  8. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount of $2,000 (no earnings or losses) on the next screen.
  9. TurboTax will ask for an explanation statement where it should be stated that the original $2,000 plus $309 earnings (or loss) were recharacterized.
  10. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" since you are doing a backdoor Roth. 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 enter the Form 1099-R with code N for the recharacterization on your return. Please see Where do I enter my 1099-R?

 

To clarify, did you make the conversion to Roth IRA in 2024 and do you have another Form 1099-R for the conversion? The conversion part is reported in the year the conversion happened. 

 

Please see How do I enter a backdoor Roth IRA conversion?