Tax Forms for Roth IRA recharacterization to Traditional IRA and then backdoor Roth after December 31st

[sdsurfer]

So I was doing my wife and I taxes this year and realized we/our financial advisors made a mistake.

We both opened new IRAs with financial advisors, transferred funds from older Roth IRA accounts and then we both contributed $7000 to our new Roth IRA, in November 2024. All seemed set and good till TurboTax informed me based on our income being above $240k, our Roth IRA contributions are excess contributions and will be taxed at 6%. From google it appears this penalty can be avoided by recharacterizing our Roth IRA contribution to traditional IRA contributions.

My question is say we each recharacterize the $7,000 to a traditional IRA contribution this week (feb 17th 2025), and then do a backdoor Roth next week (Feb 24th 2025):

1) its appears since we have not filed this is still allowed?

2) Will the bank who hosts our IRA generate the required documents (from google it appears from 1099-R and 5498?) intime for us to complete our 2024 Year taxes or how does that work from a tax reporting standpoint

3) How do I enter all this in Turbo Tax.

[DanaB27]

1) Yes, you can recharacterize the IRA contribution and then convert it.

2) Yes, you will get two 2025 Form 1099-R in 2026, one with code R for the recharacterization and one for the conversion with code 2 usually. A Form 1099-R with code R will do nothing to your return. You can only report it as mentioned below. Therefore, you can ignore the Form 1099-R with code R when you get it in 2026.

3) You will report the recharacterization on your 2024 return when you enter the contribution to the Roth IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Answer ‘Yes” on the “Roth IRA Contribution” screen
6. Answer “No” to “Is This a Repayment of a Retirement Distribution
7. Enter the Roth contribution amount 
8. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
9. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
10. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" since you are thinking about doing a backdoor Roth. If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible.

TurboTax will create the 2024 Form 8606 with a basis on line 14 and this will be carried over to your 2025 return.

The conversion will be entered next year on your 2025 return since it happened in 2025. Please see How do I enter a backdoor Roth IRA conversion? for additional information.