Need Help with 1099-R

[dmertz]

Note that in a separate post TomDx indicates having performed a completely different contribution and conversion scenario, so none of the details provided seem trustworthy:

https://ttlc.intuit.com/community/retirement/discussion/need-help-with-a-non-deductible-contribution...

[dmertz]

TurboTax recognizes a $2,000 traditional IRA contribution through the entry of the original $2,000 Roth IRA contribution and the user indicates that $2,000 was "switched" (recharacterized) to be a traditional IRA contribution instead.  This also causes TurboTax to prompt for the entry of the explanation statement required for the recharacterization.  Entering the code-N Form 1099-R contributes nothing to the tax return other than producing a corresponding increase in the amount on Form 1099-R line 4a.

[TomDx]

Shouldn't I have 3 1099-R's?  One for the conversion of the correct backdoor Roth, One for the recharacterization of Roth contribution made in error, and One for the conversion of the recharacterization amount? My Vanguard account says I contributed $8,000 in 2024.

[RobertB4444]

Are you trying to import these 1099-Rs from your broker?  You talk about TurboTax entering numbers for you.  These need to be manually entered by you.  If you decide you want to do it as 3 1099-Rs or 2 that is fine.  

But you can't do a backdoor Roth for more than $7000 and you are ignoring good advice from @dmertz above.  

@TomDx 

[TomDx]

Yes, I'm doing all this through Turbotax. 

Sorry if I'm not clear.... What I meant is that I only have 2 1099's... one for a distribution (conversion ?) and one for the recharacterization.  Shouldn't I have been issued a third for the conversion of the recharacterization?  I made $8,000 in contributions and only have $6,000 in distributions... it seems like there is $2,000 missing.

[RobertB4444]

Wasn't the $2,000 from 2025?  In that case you'll get a 1099-R for it next year.

@TomDx 

[TomDx]

I did $7,000 in 2024 and $1,000 in Jan of 2025... all for 2024.  The $2,309.28 recharacterization was done in Sept 2024 (the actual mistake into the Roth was in Feb 2024)... about a week later I converted it, which left 0.00 in my traditional.  I knew this was going to screw things up... and I made it worse by making a 2024 contribution in 2025... and then converting it in 2025.

I really appreciate everyone taking time to respond.

Thanks

[dmertz]

As indicated by the code-2 2024 Form 1099-R, it seems that in 2024 you converted only $6,298.87 in 2024.  Since you made $7,000 of contributions in 2024 for 2024, this seems to imply that your traditional IRA suffered investment losses before the conversion, resulting in $1,701 of your basis in nondeductible traditional IRA contributions being on line 14 of your 2024 Form 8606 to be carried forward to 2025, with only $6,299 of basis being applied to your 2024 conversion.

Since you made $2,000 of your traditional IRA contribution for 2024 by way of a recharacterized Roth IRA contribution, this implies that you made only an additional $5,000 in direct traditional IRA contributions in 2024 for 2024.

The $1,000 contributed in 2025 for 2024 cannot have been converted to Roth in 2024.  That conversion, assuming that one will be or already has been done in 2025, will be reportable on your 2025 tax return and will use some of the basis carried forward from 2024 to reduce the taxable amount, probably to zero.

[dmertz]

This all would have been better if kept together on a single thread.

The $1,000 contributed in 2025 cannot have been converted in 2024, so would not be included on the code-2 2024 Form 1099-R.  If you have done any conversions in 2025, they will be reported on a 2025 Form 1099-R that you will report on your 2025 tax return.

All of the conversions done in 2024 should be combined on an single code-2 2024 Form 1099-R from the IRA custodian if they all were done from the same traditional IRA account.

[fanfare]

@dmertz 

I see nothing in Pub 590A stating an explanation statement is required for recharacterization.

[dmertz]

Pub 590-A refers to the Instructions for Form 8606 where the requirement is stated.