Good Evening All,
I made a mistake in January 2022 and contributed to my Roth IRA which should have been a non deductible contribution to my regular IRA, due to income thresholds. I did not realize the error until March of 2023 (when I was preparing my 2023 taxes). I initiated a recharacterzation of the Roth IRA contribution (there was a loss) to a regular IRA. Once the characterization was finalized, I immediatly initiated a conversion of the (new) regular IRA funds to a Roth IRA (both the recharaterzation and conversion occurred in March of 2023).
I received two 1099-Rs, the first for the roth recharacterization to a regular IRA showing the gross distribution and coded ‘R’ in box 7. A second 1099-R for the (new) regular IRA conversion to a Roth IRA showing the gross distribution (box 1) and the taxable amount (box 2a.). Box 1 and box 2a. show the same number. Box 2b. notes both boxes are checked. Additionally, box 7 (distribution code) shows ‘2’ with the IRA/SEP/SIMPLE noted ‘X’. All of the above I understand and highly confident the 1099-Rs are correct.
Here's the problem I am struggling with. I have not contributed any more funds in 2023 to any IRA and dont plan to. Now, how do I deal with both 1099-Rs. I have read other posts and the different situations folks have gotten themselves in but can’t figure out what to do in mine. I have entered the conversion recharacterized contributions under the 'Deductions & Credits' section 'Retirement and Investments' as 2023 contributions. Under ‘Wages & Income’ section ‘Retirement Plans & Social Security’, I entered in only one of the 1099-Rs, the 1099-R relating to the newly established recharacterzation IRA in which the ‘2023 Form 5498 IRA Contribution Information’ shows the ‘Recharacterized contributions’. The second 1099-R is sitting here on the table and shows the ‘Roth IRA conversion amount’. Do I enter the second 1099-R into the ‘Wages & Income’ section ‘Retirement Plans & Social Security’? If I do, it shows on 1040 line 4a. double the amount of ‘IRA Distributions’.
You'll need to sign in or create an account to connect with an expert.
You should have entered the recharacterization on your 2022 return in IRA section under Deduction and Credit and you can ignore Form 1099-R code R because a 1099-R with code R will do nothing to your return. You can only report the recharacterization in the IRA section under Deductions and Credits (on your 2022 return since it was a contribution for 2022). If entered correctly you should have a 2022 Form 8606 with the basis on line 14 and this will be entered on your 2023 return when you enter the second Form 1099-R for the conversion.
On your 2022 return you should have entered these steps:
On your 2023 return to enter the Form 1099-R for the conversion:
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Confused1231
Returning Member
jc169
New Member
jignesh123
Level 1
Ats1
New Member
RGMfromSLC
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.