I opened a Roth IRA in 2018. I just filed for recharacterization of Roth into a traditional IRA today. What tax forms should I submit and what is the deadline? Thanks.

[sarahung0816]

I already filed my tax returns for 2018 last week. Should I file for amendments? If so, what tax forms I should file and what the deadline would be? Thank you.

[macuser_22 · Accepted solution]

Today is the deadline to file a 2018 tax return, however, if you are getting refund there is not penalty for late filing.

The proper way to report the recharacterization and earnings which is to enter the 2018 Roth IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".

The amount The amount of the original Roth contribution must be entered - not any earnings or losses.

Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.

There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.

When you receive a 2019 1099-R with a code R next year, you can ignore it.

A code R 1099-R does nothing whatsoever if entered into the 1099-R section of an amended 2018 return. It does not get sent to the IRS and nothing goes on the tax return at all. The only purpose of the 1099-R is to report the recharacterization to the IRS, but it still must be reported on your 2018 tax return as above.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

[sarahung0816]

Sorry I should have mentioned that I already filed my tax returns last week. I would assume I should file amendments. Is there a specific form I should file for amendment? When is the deadline for it? Thanks.

[macuser_22]

I would wait for the actual 1099-R to arrive in 2020.   There is no advantage to amend prior to that just in case that the amounts on the actual 1099-R are different from what you think they will be.   You have 3 years from today (Apr 15) to amend 2018.

[sarahung0816]

Thanks very much! Prior to 2020, should I file form 8606 and 1040X in 2019? If so, would the deadline be today or October 15?

[macuser_22]

You can, if you want it to be a non-deductible contribution.  The  time limit it to do the recharacterization is before April 15 (or Oct 15 if you filed a timely tax return or extension).   Since you met the deadline already, then when you report is is immaterial.      

If you want to claim the Traditional IRA deduction then amending might increase your refund amount.    Keep in mind that amended returns take about 4 months to process.

[sarahung0816]

This is very helpful. Thank you!