Tax planning for after recharcterize 2023 roth IRA contribution to TIRA

[kckoo84]

I’m preparing 2023 tax return. I had a direct Roth IRA contribution of $6k after tax money in 2023 but realized my 2023 income does not allow that direct Roth IRA contribution. 

So I’m planning to talk to my IRA to re-charterize it to TIRA.
FYI, $6k grew after the contribution now it became $6.4k. 
Searching this community it looks in 2023 tax return, I need to choose IRA contribution -> Roth IRA -> Did You change your mind to report my Roth->TIRA recharacterization for 2023(Done in 2024).

But below two things make me worry about my recharacterizations plan
1. I have $1500 of carry over basis for TIRA from my 2022 8606 line 14. 
2. I have rollover IRA account(rolled over from 403(b) pre tax) with 2023 year ending balance of $1300
I’m trying to figure out if there is any circumstances my 2023 recharacterization causing me another income tax calculated out of 2023 8606 form due to above two things.

and another thing, I can’t figure out which tax year I need to pay income tax for this $0.4k, the money grown during $6k sit in Roth IRA account before Recharacterizations. Will it be this 2023 year or 2024 tax year?

Could you please advise ?

[fanfare · Accepted solution]

recharacterization: the original amount to the first IRA you report as contribution to the second IRA, earnings move but are ignored.
You must use a trustee-to-trustee transfer, before the due date April 15,2024.

You will instruct trustee to calculate the allocable earnings.

report this on your tax return for the year during which the contribution was made.
Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA.

==

If you plan to leave the money in the Traditional IRA there will be no tax consequence.

If you are eligible for a deduction you can take a deduction for a 2023 contribution of $6,000 ( not $6,400).

Otherwise declare it non-deductible and it adds $6,000 to your IRA basis. File Form 8606.

@kckoo84