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Level 3
posted Mar 26, 2024 4:48:09 PM

Enter the total value of your Roth IRA(s) on December 31, 2023

I contributed to a Roth IRA for both the years 2022 and 2023 in 2023. I recognized this year that I am not eligible to contribute directly to a Roth IRA. So I withdrew 2022 contribution (I will fill out 5329 form for both years 2022 and 2023). I recharacterized the 2023 contribution and did a backdoor contribution to Roth IRA. What should be my response to the below questions: 

 

1. Enter the total value of your Roth IRA(s) on December 31, 2023

2. Enter the amount, if any, of your contributions to a traditional IRA for 2023 that were actually made from January 1, 2024 through April 15, 2024

 

I appreciate any help. 

0 3 2284
1 Best answer
Expert Alumni
Mar 31, 2024 6:15:19 AM

1) You will enter the value of your Roth IRAs on December 31, 2023 (including 2023 contributions made in 2024).

 

2) If you did not make any direct contribution to the traditional IRA then you will not enter anything under traditional IRA contributions.

 

You will enter the recharacterization when you enter the contribution to the Roth IRA:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “Roth IRA”
  5. Answer ‘Yes” on the “Roth IRA Contribution” screen
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution
  7. Enter the Roth contribution amount 
  8. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
  9. 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.
  10. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" since you are thinking about doing a backdoor Roth. (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)

 

 

 

You will get a 2024 Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2023 and this belongs on the 2023 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore the Form 1099-R with code R when you get it in 2025.

3 Replies
Expert Alumni
Mar 31, 2024 6:15:19 AM

1) You will enter the value of your Roth IRAs on December 31, 2023 (including 2023 contributions made in 2024).

 

2) If you did not make any direct contribution to the traditional IRA then you will not enter anything under traditional IRA contributions.

 

You will enter the recharacterization when you enter the contribution to the Roth IRA:

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions” 
  3. Click on “Jump to IRA contributions"
  4. Select “Roth IRA”
  5. Answer ‘Yes” on the “Roth IRA Contribution” screen
  6. Answer “No” to “Is This a Repayment of a Retirement Distribution
  7. Enter the Roth contribution amount 
  8. Answer “Yes” to the recharacterized question on the “Switch from a Roth To a Traditional IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
  9. 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.
  10. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" since you are thinking about doing a backdoor Roth. (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)

 

 

 

You will get a 2024 Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2023 and this belongs on the 2023 return. But a Form 1099-R with code R will do nothing to your return. You can only report it as mentioned above. Therefore, you can ignore the Form 1099-R with code R when you get it in 2025.

Level 3
Mar 31, 2024 7:48:29 AM

Thank you for the reply. Just to confirm, since I withdrew the 2022 contribution in 2024 - the balance on December 31, 2023, will include both 2022 and 2023 contributions and associated gains/loss. Is that correct? 

Expert Alumni
Mar 31, 2024 1:35:17 PM

Yes, that is correct.