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Level 1
posted Feb 18, 2022 7:48:30 AM

Not sure how to handle recharacterized Roth IRA

Hello all,

 

My husband and I both maxed out Roth IRAS for 2021. At the end of 2021,  we realized we were over the income limits for contributing to a Roth. We had our contributions for 2021 recharacterized into a Traditional IRA. Well, I got a 1099R for my recharacterization and my husband got nothing from Schwab. My IRA is with a different company. We don’t know what to do about his recharacterization on our 2021 tax return if anything. Help? 

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1 Replies
Expert Alumni
Feb 18, 2022 5:23:48 PM

The best practice is to call Charles Schwab to see if the 1099R will be sent out. Make every reasonable effort to get this. If not, you can file a substitute 1099R but you need to make sure that the information that is recorded is correct information, including the EIN number. Here is how to handle.

  1. Go to Federal > Wages & Income
  2. Scroll down to see all income. 
  3. In the Retirement Plans and Social Security section, click Start next to IRA, 401(k), Pension Plan Withdrawals (1099-R).
  4. Click I'll type it in myself
  5. On the Tell Us Which 1099-R You Have screen, select the type of 1099-R you have and then check the box at the bottom next to I need to prepare a substitute 1099-R
  6. Proceed through the interview to enter your 1099-R information.
  7. Now, call your broker to get the EIN  and other information to prepare the substitute 1099R. Having this will enable you to eflle your return. Then enter the information that is required on the form.  In box 7, you will use distribution code N. Also ask what the distribution was and if there were taxes withheld at the federal and state level.
  8. After entering, go through the section and there will be a screen that asks how you figured the amounts that you entered into the form. Say that you got this information from the broker.
  9. Next it will ask what effort you made to get the 1099R. Here you will relate what your broker said to you.
  10. Next it will ask if this is from a qualified plan, you will say yes.