Recharacterization from Roth IRA to Traditional IRA

[icart]

I contributed $7950 to ROTH IRA in 2024 and didn't have a  Traditional IRA.  Then, when doing taxes, found out I made too much to contribute.  I opened a traditional IRA account in March 2025 and did a recharacterization from ROTH to Traditional of $ 7000 which netted to $ 6896.38 all before filing taxes for 2024 data.  How do I enter this?  I thought I answered everything correct on the ROTH IRA portion but, in the end when reviewing, I have an error.  It has line 25 as $ 6896 but says that can't be larger than line 24 (Roth contributions) which it has $950.00.   I did not enter $950 anywhere.  It calculated it based on my answers.

Also, do I need to enter the 6896.38 as a contribution to the Traditional IRA or wait until 2025 taxes to do that since the recharacterization was done in March 2025?  I plan to do a backdoor Roth when Fidelity finishes the transfer (hopefully tomorrow).

I guess I'm missing something here and would appreciate guidance.  Thank you 

[fanfare]

"do I need to enter the 6896.38 as a contribution to the Traditional IRA "

You need to enter a contribution of $7,000 for 2024 to the Traditional IRA and elect non-deductible. your negative earnings are ignored.

Your Roth conversion done in 2025 goes on your 2025 tax return.

@

[dmertz]

To cause TurboTax to ask you to prepare the required explanation statement for the recharacterization, you must enter the original $7,950 Roth IRA contribution, tell TurboTax that you "switched" $7,000 to be a traditional IRA contribution instead, then provide the explanation that you recharacterized $7,000 of the original $7,950 contribution, resulting in a loss-adjusted amount of $6,896 to be transferred to the traditional IRA.  TurboTax will then show on your tax return the resulting $7,000 traditional IRA contribution.  If nondeductible, it will appear on 2024 Form 8606 Part I to add to your basis in nondeductible traditional IRA contributions.

Because the Roth conversion occurred in 2025, nothing about the Roth conversion will appear on your 2024 tax return.  It will be reportable on your 2025 Form 8606.

Regarding the error flagged by TurboTax, you told TurboTax that you recharacterized $7,000 of the $7,950 original Roth IRA contribution, leaving $950 as a Roth IRA contribution.  I think you then told TurboTax that you received a return of $6,896 of your Roth IRA contribution, which is not what you did.  After recharacterizing $7,000 of the original $7,950 Roth IRA contribution, only $950 of the original Roth IRA contribution remained.

[icart]

Thanks for the feedback.   I think you are on to something.   I put in $6896 in my recharacterization explanation.   Then it asks if I withdrew any contributions before April 15th of 2025 and I put the $6896 in there also.   Are you saying that I should not have counted that as a withdrawal?   After I answer that question then it says, based on what you've entered you don't qualify for an Ira deduction and it shows it at 0.  Then the summary page of tax breaks shows it at 7000 for my traditional and roth ira contributions

Thanks for helping me.   I've searched everywhere online. 

[dmertz · Accepted solution]

The $6,896 transferred from the Roth IRA to the traditional IRA was not a "withdrawal."  It accomplished a recharacterization that transformed your $7,000 Roth IRA contribution into a $7,000 traditional IRA contribution.

[icart]

Thank you.   If I remove that,  everything works as expected.   You are awesome.   I appreciate the help.