I am over age 50 and contributed $7000 to my Roth IRA in 2022 for 2023. Turns out my income was too high so I had to recharacterize it as a traditional IRA contribution for 2023. The amount recharacterized was $7300 due to investment gains. IRS has revised the max contribution for 2023 to $7500 for those above 50. However, Turbotax tells me I cannot contribute more than $7000 and that the remaining $300 is an excess contribution. How do I fix this in Turbotax?
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"I am over age 50 and contributed $7000 to my Roth IRA in 2022 for 2023."
That doesn't make any sense. One is not permitted to make a contribution for a future year. I'll assume that this is a typo and you properly made a $7,000 Roth IRA contribution for 2023.
You recharacterized $7,000, not $7,300. $7,300 was the gain-adjusted amount transferred, not the amount recharacterized.
only recharacterize the amount contributed exclude the earnings
My earlier post was incorrect so I am correcting the record and asking a slightly different question. I had contributed $7000 to a Roth IRA in 2022 but on preparing my taxes in 2023, found out my income was over the Roth limit and recharacterized the $7000 plus earnings (300) to a traditional IRA. I reported it on my 2022 tax. However, my brokerage firm did not issue any new tax forms for 2022 and instead issued a Form 5498 and 1099-R which showed the amounts as a contribution for 2023 - when I questioned this, they pointed out that the code number for the contribution shows that it was a recharacterization done in 2023 which applied to 2022 tax year. My question is how to make this clear to the IRS? Do I need to provide an explanatory statement? I don't see a way to add a statement to a Turbotax efiling or a way to upload these two relevant forms. Any suggestions?
what are the codes in box 7?
If you have not already done so, when you enter the $7,000 Roth IRA contribution into TurboTax and TurboTax asks if you "switched" from Roth to a traditional IRA, answer Yes and indicate that you "switched" (recharacterized) $7,000. TurboTax will prompt you to provide an explanation statement describing the recharacterization. If you are amending your 2022 tax return to either correct Form 5329 that previously showed an excess Roth IRA contribution or to add the traditional IRA contribution as either nondeductible on Form 8606 or deductible on Schedule 1, you can provide this explanation on the accompanying Form 1040-X.
Entering the code R 2023 Form 1099-R itself is unnecessary. You can enter this form for recordkeeping purposes if you like, but doing so will have no effect on your tax return.
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