You need to file Form 8606 if you choose to make the Traditional IRA contribution nondeductible or if it's automatically nondeductible because of your income and a retirement plan at work.
You can first enter a recharacterization to add the Explanation statement and then edit the entry to show just a Traditional IRA contribution. The statement will be still attached to the return.
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Traditional IRA”
- Answer ‘Yes” on the “Roth IRA Contribution” screen
- Answer “No” to “Is This a Repayment of a Retirement Distribution
- Enter the Traditional IRA contribution amount
- Answer “Yes” to the recharacterized question on the “Switch from a Traditional To a Roth IRA?” screen and enter the contribution amount (no earnings or losses) on the "Tell us how much you transferred" screen.
- 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 to a Roth IRA in 2024. The contribution $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized to a Traditional IRA in 2025.
- Click "Back" and delete the entry on the “Switch from a Traditional To a Roth IRA?” screen and then continue through the questions.
- On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" if you are thinking about doing a backdoor Roth. Otherwise select "No". (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)
Form 1099-R with code N needs to be entered on your return but you can ignore Form 1099-R with code R.
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