Our joint income in 2022 and 2023 was too great to allow for roth ira contributions. We paid the 6% penalty in our 2022 taxes then forgot about the issue until recently. We recharacterized the contribution to a traditional IRA recently. How do I report the recharacterization in our 2023 taxes that are due on October 15th?
An excess Roth IRA contribution made in 2022 is not permitted to be recharacterized in 2024.
The only thing that I can see that could potentially be done in 2024 to correct the excess Roth IRA contribution from 2022 and move the money to a traditional IRA is to take a regular distribution equal to the amount of the excess Roth contribution and use that cash as you would any cash to make a regular traditional IRA contribution independent of the Roth IRA distribution. However, this would not eliminate the excess and 6% penalty for 2023. It would only eliminate the excess and penalty for 2024 and beyond.
An excess Roth IRA contribution made in 2022 is not permitted to be recharacterized in 2024.
The only thing that I can see that could potentially be done in 2024 to correct the excess Roth IRA contribution from 2022 and move the money to a traditional IRA is to take a regular distribution equal to the amount of the excess Roth contribution and use that cash as you would any cash to make a regular traditional IRA contribution independent of the Roth IRA distribution. However, this would not eliminate the excess and 6% penalty for 2023. It would only eliminate the excess and penalty for 2024 and beyond.