How to report recharacterization the following year? Complex tax situation

[anbuitachi]

Basically wife contributed 6000 in 2021 to Roth directly. Got married later in 2021 and combined income no longer allow for direct roth contribution.

End of 2021 her ROth was worth 6150$

In 2022 she converted all of her Roth to IRA in preparation for tax filing. However, now her roth account is only worth 5500$ so she converted 5500 to IRA.

She received a 2021 Form 5498 IRA from Fidelity saying roth contribution of 6000, account value of 6150.

She hasnt received a recharacterization form since it was in 2022.. but even so the amount recharacterized is LESS than 6000. 

I have desktop turbotax premier. how would one file this for 2021 filing?

[DanaB27]

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 “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount of $6,000
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount of $6,000 (no earnings or losses)
8. 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.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if 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 Form 1099-R  for the recharacterization with code R-Recharacterized IRA contribution made for 2021 and this belongs on the 2021 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 2023. The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

[anbuitachi]

Hi, turbotax after asking me how much i contributed to roth (6000), also ask me how much i recharacterized. do i write 6000, or the amount after losses? I lost 800$ so do i put 5200? It reduces my refund when i put 5200!

[DanaB27]

You will enter $6,000 (contribution amount without earnings or losses) as recharacterized.

@anbuitachi