IRA

[druss75]

I asked the bank to set up a traditional IRA for me in 2019.  They set up a Roth IRA.  I already had a Roth IRA.  To remedy this, the bank set up a Traditional, 4000.00 of the 7000.00 I contributed was re-characterized to the Traditional.  Also, the 1000.00 over payment was removed and refunded.  Turbo tax is indicating that I paid 3000.00 over for some reason.  Pleas help.   

[macuser_22]

What do you mean "$1,000 over payment"?

How are you entering it?

The proper way to report the recharacterization and earnings which is to enter the 2019 IRA contribution in the Roth 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.

(If part of the contribution was returned and not recharactorized then do not enter that part.)

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.

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.

[AmyC]

The $1,000 for over age 50 did not apply so it came back out?  @macuser22 did a great job!