Thank you everyone for the guidance. I just completed a scenario based upon the advice given. Just as prior, I entered in the 1099R section the $550 amount as a shown on the 1099R.
Then, working through the Q/A under Deductions and Credits>IRA's....
First the TIRA relevant question:
1) Tell us how much you contributed to a TIRA for 2022. Answer: 0. If I input $583 it adds that to the $583 that I recharacterized which is obviously not correct.
Then, Roth IRA Questions:
1) Enter your Roth IRA contribution. Answer: $583
2) Tell us how much you transferred. Answer: $550 (per advice from this forum)
Here is my Roth IRA Explanation Statement:
Date of the Original Roth IRA Contribution: 1/24/2022
Date of the Roth to Traditional IRA Recharacterization: 12/14/2022
The Amount Recharacterized: $583.
The Amount Transferred (Recharacterization with loss): $550
Reason for the Recharacterization: Roth overcontribution due to income limit
Now, I'm entering the "Lets track your Roth IRA basis" section, there is a question below:
"Enter Excess Roth IRA Contributions for prior years."
Does this mean for 2022 or prior to 2022? For now, I entered 0 because I read it as prior to 2022.
Turbotax then says I have a penalty because of an excess contribution of $33 to my Roth IRA. This is NOT correct since I recharacterized to the TIRA the entire amount remaining from the excess Roth contribution ($550). Remember, I had a loss within the Roth IRA from $583 down to $550.
Turbotax then ask the question, "Contributions withdrawn before the due date." As I understand it, a recharacterization is not considered a withdraw. Just for giggles, if I enter $33, the penalty goes away. But I didn't factually withdraw the $33 so thats not an option.
This leads me to believe that I should be entering $583 in the highlighted RED font question above. When I enter $583 in this red question above, obviously there is no penalty because I'm transferring out the same amount as my $583 excess roth ira contribution.
Thoughts? I want to add, that this scenario cannot be that uncommon. It is easy to inadvertently overcontribute to a Roth IRA and the fix per vanguard is to simply recharacterize the over contribution to a TIRA. I should not be struggling this much with reporting this correctly in TT, right? Any help is greatly appreciated.
