topic Re: IRA re-characterization in Retirement tax questions

IRA re-characterization

SK28 — Sat, 22 Mar 2025 21:01:54 GMT

I contributed $5000 to my Roth IRA in 2023, then in January 2024 I re-characterized it to Traditional IRA because my wages went over the limit. I received a 1099-R in 2024 showing $5000 Distribution Code (R) and another 1099-R with $470 distribution code (N). I imported both these forms to TurboTax.

In 2024, I contributed the full allowed amount to my Traditional IRA ($7,000). What do I need to enter as contributions for 2024, just the $7000, or do I have to report the re-characterized amounts as well? If I do, then I am going over my limit for 2024.

Re: IRA re-characterization

fanfare — Sat, 22 Mar 2025 21:20:24 GMT

recharacterization: the original amount to the first IRA you report as contribution to the second IRA, earnings move but that is ignored.
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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.

Your broker says you did two recharacterizations, you don't import both

report N contribution on your 2024 return

report R contribution on your 2023 return

Re: IRA re-characterization

fanfare — Sat, 22 Mar 2025 21:35:42 GMT

"In 2024, I contributed the full allowed amount to my Traditional IRA ($7,000)."

making your own max contribution in addition to a recharacterized amount means you have exceeded your contribution limits.

It's not clear where the $474 comes from (my guess is custodian error). probably you need a corrected 1099-R

Is your IRA at a bank or credit union?

Re: IRA re-characterization

fanfare — Sat, 22 Mar 2025 21:42:28 GMT

check the actual amount that was moved into your IRA.

If it is $5,470 it is definitely custodian error to give you that 1099-R.

@SK28