Reporting a partial recharachterization of my 2024 IRA contribution from traditional to Roth

[Biblio_67]

I contributed $8000 to my traditional IRA for 2024 (7K + catch-up), then realized my AGI was too high to deduct all of it. So I recharachterized $5000 to a Roth IRA (leaving the remaining $3000 in the traditional IRA). I am waiting for confirmation from my broker, but I assume there were earnings on the $5000 before it was recharachterized.  I entered my initial traditional IRA contribution of $8000 in Turbotax and indicated that $5000 of it was subsequently recharachterized to a Roth IRA. I have also included an “explanation” in the notes field that Turbotax provides. I have the following remaining questions I’m hoping someone can help with:

1. Do I need to report the earnings on my 2024 return, and if so, what is the best way to do that?

2. What else do I need to do as far as appropriately documenting this recharachterization in Turbotax?

Thanks in advance for your help!

[ThomasM125 · Accepted solution]

You do need to report the earnings on your 2024 tax return. You can do that by entering in a substitute Form 1099-R:

To enter a refund of excess IRA contributions received in 2025 for 2024 contributions on your 2024 return, follow these steps:

1. Go to the personal income section of TurboTax 
2. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
3. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
4. Choose Add Another 1099-R
5. Choose I'll type it in myself
6. On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
7. Enter the distribution amount in box 1 of the substitute 1099-R
8. Enter the earnings in box 2(a)
9. Enter code "8" in box 7

[Biblio_67]

Thank you so much for your help with this Thomas!

[fanfare]

When you recharcterize, applicable earnngs go along for the ride but that is ignored.

As far a basis is concerned, your original contribution to the first IRA is now a contribution to the second  IRA.

Earnings would be taxed when distributed.

"What else do I need to do"

Report an IRA  deduction if you can and will take it.

Otherwse, elect non-deductible. this goes on Form 8606.

@Biblio_67