Hello:
I made a mistake in my retirement contributions for the past 2 years and I’m not quite sure how to file my tax returns correctly. I intended to do a IRA to Roth IRA conversion but ended up mistakenly recharacterizing it as a Roth IRA, which resulted in withdrawing all the contributions in 2023, as I'm not qualified for the Roth IRA contributions.
My situation is a bit complicated with the timing. I believe I need to amend my 2021 and 2022 tax return, and I hope to get some expert help from the community.
Here’s what happened:
(1) Year 2021 IRA Contribution:
I tried to do an IRA to Roth IRA conversion since my income exceeds the MAGI limit. So on Apr 14 2022, through an investment manager at Bank of America (BofA), I contributed $6,000 (non-deductible) to IRA for the year 2021. However, on May 5 2022, the manager mistakenly used the recharacterization form to “convert” the money to Roth IRA (my bad for not realizing the difference at that time).
And I filed my 2021 tax return on Apr 18 2022, so I’m not even sure if this recharacterization is valid or not since it’s after the tax due date.
In Jan 2023, I received a 2022 1099-R Form (IRA - Box1: $6,000, Box 2a: $0, Box 7: R). When filing my 2022 tax return, TurboTax told me to amend my 2021 tax return, which puzzled me.
Then, I realized that the whole thing was a mistake. So, I talked to another advisor in BofA and was advised to withdraw the contribution and any gain/loss out to avoid further penalties.
On Sep 20 2023, I withdrew a total of $6,237.76 from the Roth IRA, which includes $214.98 of short-term capital gain + $22.78 of interest.
This happened before my 2022 tax return due date (Nov 16 2023) because I’m a California resident and the IRS has postponed the due date to Nov 16 for 2023 because of winter storms.
This year in Jan 2024, I received a 2023 1099-R Form (Roth IRA - Box 1: $6,237.76, Box 2a: blank, Box 2b: Taxable amount not determined checked, Box 7: J).
2) Year 2022 IRA Contribution:
Without realizing the difference between conversion and recharacterization, I stupidly made the same mistake.
On Feb 27 2023, I made a contribution of $6,000 (non-deductible) to IRA for the year 2022. Then, on Jun 23 2023, I mistakenly recharacterized it to Roth IRA. After realizing the problem, the $6,000 was withdrawn from the Roth IRA, on Sep 8 2023.
Notice the entire sequence of events happened before tax due date (Nov 16 2023) though.
In Jan 2024, I received 2 relevant 1099-R Forms: [1] IRA (Box 1: $6,000, Box 2a: $0, Box 7: R); [2] Roth IRA (Box 1: $6,000, Box 2a: $0, Box 7: JP).
Overall 1099-R Forms received:
Here are my questions (sorry for the long list):
Apologize for the long post and many questions! I really appreciate your professional and expert help!
Thank you very much!
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