I reported a 1099-R because I recharacterize my Roth to a traditional IRA in 2019 in my 2019 tax filing. Should I also file an amendment for 2018? Thank you?

[macuser_22]

What code is in box 7 on the 2019 1099-R?

[sarahung0816]

It's "R". Thank you.

[macuser_22]

If this was a contribution *for* the 2018 tax year then it must either be reported as a deductible Traditional IRA contribution on the 2018 1040 form Schedule 1 line 32 or as a non-deducible contribution on a 2018 8606 form line 1.       If either of those were part of your 2018 tax return then there is nothing more to do.  If not, the you need to amend 2018 and report it as below.

A 2019 1099-R with a code R in box 7 (Recharacterized IRA contribution made for 2018 and recharactorized in 2019) will tell you that you must amend 2018.

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.

The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

The proper way to report the recharacterization and earnings which is to enter the 2018 Roth IRA contribution in the IRA contribution interview section as a Roth contribution 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.

That is the only way to prepare and attach the proper explanation statement for a code R 1099-R.

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.

Since the after-tax Roth contribution is now a Traditional IRA contribution it can be either a before-tax deduction if your MAGI allows a deduction which might result in an additional 2018 refund, or it will be an after-tax contribution reported on a 8606 form (line 1 & 14) as a "basis" in the Traditional IRA that will reduce the tax of future distributions.

[sarahung0816]

You mentioned “The proper way to report the recharacterization and earnings which is to enter the 2018 Roth IRA contribution in the IRA contribution interview section”. Can you please clarify where I can report the recharacterization? Did you mean the tax filing for 2019 or the amendment for 2018? If it’s the amendment for 2018, can you please let me know where on TurboTax can I start the amendment? Thank you.

[macuser_22]

I explained above hoe to enter it in the IRA contribution interview as a Roth contribution and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".

Yes, this must be reported on a 2018 amended tax return.

You cannot amend 2018 on TurboTax, that can only be done with the 2018 software installed on a Windows or Mac computer.

Amended returns can only be mailed. It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it.

See this TurboTax FAQ for detailed amend instructions:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

-- Amended returns can only be mailed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing.

You can check the status of the amended return here, but allow 3 weeks after mailing.

https://www.irs.gov/filing/wheres-my-amended-return

[sarahung0816]

Thank you. Where can I find the IRA contribution interview as a Roth contribution and the question of “Did you switch from a Roth to a Traditional IRA - recharacterize"? In the federal tax filing for this year? 

[macuser_22]

Look at my post above - I already posted that.

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]

Thank you. As I already filed my tax for this year, how can or which boxes should I check if I filed the techaracterization correctly?

[macuser_22]

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@sarahung0816 wrote:

Thank you. As I already filed my tax for this year, how can or which boxes should I check if I filed the techaracterization correctly?

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That would depend if you choose to deduct the now Traditional IRA contribution (if eligible for a deduction) or make it a non-deductible contribution.

A deductible contribution would  be in the 1040 Schedule 1 line 19 or the non deductible contribution on line 1 of a 8606 form.

There would also be a recharacterization explanation statement as part of your tax return and a IRA Contribution Worksheet that shows it.

[sarahung0816]

Thank you. As to the amendment for 2018, I had filed 1040X, is there any other amendment I need to file?

[macuser_22]

A 1040X *is* an amended return and can only be mailed.