Two recharacterizations for 2025

[wsfcm]

Hello,

For 2025, I contributed $3000 to a Trad IRA and $4000 to a Roth IRA. Later in the year I discovered the Roth contribution was going to be too much so I recharacterized $1200 to the Trad. I failed to account for capital gains during the year and now that I'm preparing my taxes, learn that I've still contributed too much to the Roth so I've recharacterized another $1800 to the Trad however that's happened in 2026.

Working through this section, I've documented the $1200 recharacterization made in 2025. Later the program rightfully warns me that I've contributed too much to the Roth. There's then the option to indicate Roth contributions that I've withdrawn however entering the $1800 results in my total IRA contribution showing as $5200 for the year rather than $7000. Is that correct? Is it possible to document two separate recharacterizations for the same tax year occurring in two different calendar years?

[DaveF1006]

Yes, it is possible and correct to report both, but TurboTax's interview flow can be confusing when a recharacterization spans two different calendar years. The reason your total is showing as $5,200 is likely because you are entering the second $1,800 in the "Withdrawals/Removal of Excess" section. In the eyes of the IRS, a recharacterization is not a withdrawal; it’s a "do-over" that treats the money as if it were originally put into the Traditional IRA.

1. Why the "Withdrawal" section is wrong

When you enter $1,800 as a "withdrawal," TurboTax assumes you took the money out of the retirement system entirely (reducing your total contributions). Since you actually moved it to a Traditional IRA, your total contribution should still reflect the full $7,000 ($3,000 original + $1,200 rechar. + $1,800 rechar.).

2. The Correct Way to Enter Both in TurboTax

To document two separate recharacterizations for the same tax year (even if the second one happened in 2026), you should group them together in the Roth IRA contribution interview:

1. Enter the Full Original Amount: Tell TurboTax you contributed the full $4,000 to a Roth IRA for 2025 (your $2,800 initial + $1,200 first rechar).
2. Report the Recharacterization: When asked "Did you switch any of this contribution to a Traditional IRA?", select Yes.
3. Enter the Combined Amount: Enter $3,000 (the $1,200 from 2025 + the $1,800 from 2026). ote: Only enter the "contribution" amount, not the earnings/gains that moved with it.

Explanation Statement: TurboTax will prompt you for an explanation statement. This is where you clarify the timeline for the IRS.

3. Draft Your Explanation Statement

Since you won't get a 1099-R for the 2026 move until next year, this statement is your official record. You can use this template:

"Taxpayer contributed $4,000 to a Roth IRA for tax year 2025. On [Date], taxpayer recharacterized $1,200 plus earnings to a Traditional IRA. On [Date in 2026], taxpayer recharacterized an additional $1,800 plus earnings to a Traditional IRA. Total 2025 Traditional IRA contributions are $6,000 and total Roth IRA contributions are $1,000."

Summary Check

After following these steps, your Form 1040 and Form 8606 (if the Traditional contributions are non-deductible) should reflect:

• Total IRA Contributions: $7,000
• Traditional IRA portion: $6,000 ($3k original + $3k recharacterized)
• oth IRA portion: $1,000