New turbotax user Recharacterize Roth IRA to Traditional IRA

[Ampick]

Hello, 1st time using turbotax. Although its more expensive I am switching for 2025 taxes do to excellent community support.

January 2025 deposited $8000 (50 and older) to 2025 Roth IRA. Due to increase in wages my magi is too high and I will contact vanguard in January and have $8000 plus earnings re-characterized as a new IRA.

My concern, what steps must be taken to fill out taxes properly on turbotax.

It should be a simple process but the more I read the more confusion occurs, especially because I won't receive any tax forms 1099-?  till next year regarding this re characterization. Do I need to make one up.

If anybody can guide me thru this process it would be greatly appreciated. 

Thanks in advance for your time.

[dmertz · Accepted solution]

Much more straightforward to complete the recharacterization before the end of 2025 rather than waiting until 2026.  Doing so will mean that you will receive a 2025 Form 1099-R reporting the recharacterization instead of the recharacterization being reported on a 2026 Form 1099-R a year later.   The amount of contribution that you will recharacterize is $8,000.  The gain/loss-adjusted amount is the amount that will be transferred to accomplish the recharacterization of the $8,000 contribution.

Whether you do the recharacterization of this contribution in 2025 or 2026, in 2025 TurboTax you'll enter the original $8,000 Roth IRA contribution, then you'll tell TurboTax that you "switched" the $8,000 to be a traditional IRA contribution instead.  TurboTax will subsequently prompt you to enter the required explanation statement.  No need to make up any Form 1099-R even if you do the recharacterization in 2026.