Roth Recharacterization - The Year After

[cjames24]

We surpassed the income threshold in 2022 for a Roth IRA. When filing 2022 taxes we recharacterized the funds and completed the back door Roth. (Recharacterized the 2022 IRA in March 2023.)

In January 2024 we have now received the following forms and are unsure how to handle. 

- 1099-R Gross Distribution $5k, Taxable Amount $5k, 2b unchecked. Distribution code: R, IRA/SEP/Simple unchecked. (I think this is the form showing the Recharacterization from Roth to Traditional.)

- 1099-R Gross Distribution $5k, Taxable Amount $5k, 2b Taxable Amount not determined is checked. Total distribution is checked. With distribution code 2 and IRA/SEP/Simple checked. (I think this may be the form showing we transferred this amount from a Traditional IRA to a Roth.)

Questions -

- Do I input both forms when filing taxes for 2023? 

- Do I need to amend 2022? When filing 2022 Turbo Tax made me aware of the need to recharacterize. How do I know if I already did what needed to be done for 2022?

Thank you!

[cjames24]

Wanted to clarify that in 2023 we did have a form 8606 filled out with our taxes but no form 5329. 5329 seems to be a form I am completing with my 2023 tax return in 2024 though I am struggling to complete it. 

[cjames24]

@DanaB27 I noticed you have a good understanding of this based on your previous posts. Might you be able to assist? 🙂

[dmertz]

Since your 2022 tax return included Form 8606 and no Form 5329, you apparently correction reported the Roth contribution with subsequent recharacterization, so it seems that there is nothing the needs amending on your 2022 tax return.

Enter both Forms 1099-R into 2023 TurboTax.  The entry of the code-R Form 1099-R will cause TurboTax to remind you that the recharacterization needed to be reflected on your 2022 tax return, which already seems to be the case.  TurboTax will otherwise ignore the code-R Form 1099-R.  As for the code-2 From 1099-R, be sure to indicate that you moved the money to another retirement account and that you converted the entire amount to Roth.  The amount carried forward from line 14 of your 2022 Form 8606 will appear on line 2 of your 2023 Form 1099-R to be used in determining how much of your conversion is nontaxable.