Hi, I was wondering if someone could walk me through entering my recharacterization and Backdoor Roth IRA into turbo tax based on my situation:
- In 2024 I contributed I contributed $7,000 directly into my Roth IRA and purchased some stock
- In January of 2025 I realized I was above the limit Roth IRA limit the prior year and proceeded to perform a recharacterization in the form of the stock shares. By that time my shares had increased in value to $10,277. During the 1-2 days it was in my traditional IRA, the value increased to $10,626, and that's what was ultimately transferred back to my Roth IRA
- In April 2025 I submitted my taxes for the 2024 year with form 8606 (line 1: 7000, line 3: 7000, line 14: 7000)
- In December 2025 I contributed $7,000 into my traditional IRA and rolled it over into my Roth IRA performing a Backdoor Roth contribution for 2025. Unfortunately, 66 cents were left in my traditional IRA on January 1, 2026, and I have left it there since
- Below are my 1099-Rs from 2025 and my 5498 from the 2024 tax year. I have not received the 5498 for 2025 (and suspect I won't before the tax deadline in April 2026)
Roth IRA form 1099-R
1. Gross distribution: 10277
2a. taxable amount: 0
7. R
Traditional IRA form 1099-R
1. Gross distribution: 17626
2a. Taxable amount 17626
2b. Taxable amount not determined and total distribution are both marked with X
7. Distribution code 2, IRA/SEP/SIMPLE box marked with X
Roth IRA form 5498 from 2024
5. fair market value of account
7. IRA type Roth IRA
10. Roth IRA contributions 7000
Questions:
1. Are you able to provide me a step by step guide based on my numbers? I've walked through it myself but I get confused based on the wording of the questions and I'm unsure if I've done it correctly. I have Turbo Tax Deluxe for Windows.
2. When I went through it myself I was prompted that I might need to amend my 2024 taxes I submitted last year. It didn't provide any information on what I would need to amend. Based on the information I've provided did I make a mistake with my reporting last year on form 8606?
3. My understanding is I'll have to pay taxes on the gains I recharacterized (e.g. 10,277 - 7,000 = $3,277). Where does this get reported?
4. During my recharacterization my $10,277 increased to $10,626 while in my traditional IRA. It was in the form of stock. Is this an issue, and how do I report it?
5. How do I report the 66 cents in my traditional IRA? My plan is to perform another backdoor Roth IRA this year and just make sure my traditional IRA sits at $0 before December 31, 2026
Appreciate all the help!
