topic Roth IRA recharacterization with loss in Retirement tax questions

Roth IRA recharacterization with loss

Heiterman — Tue, 24 Feb 2026 03:54:22 GMT

I overcontributed $583 to a Roth IRA due to income limits in 2022. In Dec 2022 I recharacterized the $583 to a traditional IRA at a loss. The amount transferred was $550. The 1099R from vanguard shows $550 with a code of "N".

Is there anyplace in turbotax besides the reporting of the 1099R where I would report the transferred amount of $550?

It seems like all the forum post refer to reporting $583 in all the relevant questions asked in the Q/A section. When I review the forms section, the IRA worksheet, IRA dist-T, IRA contribution wks, and the IRA info wks all show $583.

Thank you for any thoughts and advice.

Re: Roth IRA recharacterization with loss

fanfare — Thu, 02 Mar 2023 19:35:55 GMT

enter the 550 from 1099-R .

Re: Roth IRA recharacterization with loss

fanfare — Thu, 02 Mar 2023 19:02:07 GMT

@Heiterman

I corrected the answer above.

Re: Roth IRA recharacterization with loss

fanfare — Thu, 02 Mar 2023 19:18:26 GMT

you have a $550 IRA contribution which is either deductible or not deductible based on your situation.

You can elect to make it non-deductible.

@Heiterman

Re: Roth IRA recharacterization with loss

fanfare — Thu, 02 Mar 2023 22:40:37 GMT

@dmertz Is the contribution $550. or $583 ?

Re: Roth IRA recharacterization with loss

dmertz — Thu, 02 Mar 2023 20:29:56 GMT

The amount recharacterized is $583. $550 was the loss-adjusted amount transferred. $583 is the amount of the resulting traditional IRA contribution. The required explanation should indicate that $583 was recharacterized by the loss-adjusted transfer of $550.

Re: Roth IRA recharacterization with loss

fanfare — Thu, 02 Mar 2023 22:48:21 GMT

@dmertz

Thank you.

I should know this by now.

I had to edit my answer three times already.

Re: Roth IRA recharacterization with loss

Heiterman — Fri, 03 Mar 2023 00:04:48 GMT

Thank you everyone for the guidance. I just completed a scenario based upon the advice given. Just as prior, I entered in the 1099R section the $550 amount as a shown on the 1099R.

Then, working through the Q/A under Deductions and Credits>IRA's....

First the TIRA relevant question:

1) Tell us how much you contributed to a TIRA for 2022. Answer: 0. If I input $583 it adds that to the $583 that I recharacterized which is obviously not correct.

Then, Roth IRA Questions:

1) Enter your Roth IRA contribution. Answer: $583

2) Tell us how much you transferred. Answer: $550 (per advice from this forum)

Here is my Roth IRA Explanation Statement:

Date of the Original Roth IRA Contribution: 1/24/2022

Date of the Roth to Traditional IRA Recharacterization: 12/14/2022

The Amount Recharacterized: $583.

The Amount Transferred (Recharacterization with loss): $550

Reason for the Recharacterization: Roth overcontribution due to income limit

Now, I'm entering the "Lets track your Roth IRA basis" section, there is a question below:

"Enter Excess Roth IRA Contributions for prior years."

Does this mean for 2022 or prior to 2022? For now, I entered 0 because I read it as prior to 2022.

Turbotax then says I have a penalty because of an excess contribution of $33 to my Roth IRA. This is NOT correct since I recharacterized to the TIRA the entire amount remaining from the excess Roth contribution ($550). Remember, I had a loss within the Roth IRA from $583 down to $550.

Turbotax then ask the question, "Contributions withdrawn before the due date." As I understand it, a recharacterization is not considered a withdraw. Just for giggles, if I enter $33, the penalty goes away. But I didn't factually withdraw the $33 so thats not an option.

This leads me to believe that I should be entering $583 in the highlighted RED font question above. When I enter $583 in this red question above, obviously there is no penalty because I'm transferring out the same amount as my $583 excess roth ira contribution.

Thoughts? I want to add, that this scenario cannot be that uncommon. It is easy to inadvertently overcontribute to a Roth IRA and the fix per vanguard is to simply recharacterize the over contribution to a TIRA. I should not be struggling this much with reporting this correctly in TT, right? Any help is greatly appreciated.

Re: Roth IRA recharacterization with loss

dmertz — Fri, 03 Mar 2023 02:56:30 GMT

Even if the wording of TurboTax's question suggests otherwise, TurboTax is actually asking how much was recharacterized, not how much was transferred. (I think TurboTax uses the word "switched.") The correct answer is $583.

Re: Roth IRA recharacterization with loss

fanfare — Fri, 03 Mar 2023 01:15:23 GMT

Vanguard should have told you there is another option. Just take the Roth contribution back.

Of course, if you do that, they will no longer have your money under management