Reporting recharacterization in taxes

[talktoandyli]

Hello,

So I added 1500 to my Roth IRA in 2023, and later realized I may have been above the income limit for 2022. I recharacterized 5,701.63 to my Traditional IRA and have added no further funding for 2023 in either IRA.

I've already included my 1099-R form for 2023, and in the taxes I'm reporting that I added 1500 to my Roth that was later recharacterized to Traditional IRA. Is there anywhere else I need to report in my taxes about this?

[DanaB27]

Since this was recharacterization of a contribution for 2022 it should have been reported on your 2022 tax return in the IRA contribution section.

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" if you are thinking about doing a backdoor Roth. Otherwise select "No". (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)

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.

[talktoandyli]

Hello Dana,

Thanks for responding on this. So I already reported the recharacterization for 2022 in that years taxes, but I got the 1099-R last month for my 2023 taxes. I'm confused on whether I need to add the "2023 Form 1099-R" to my 2023 tax report now according to How do I enter a backdoor Roth IRA conversion? (intuit.com). That or since I received it in 2024, I'm suppose to report it next year.

From,

Andy

[DanaB27]

Yes, if you received another 2023 Form 1099-R then you will enter this on your 2023 tax return. But you can ignore the 2023 Form 1099-R with code R for the recharacterization.

If you converted the funds in 2023 and received a 2023 Form 1099-R then please follow the steps 2 instructions from this FAQ: How do I enter a backdoor Roth IRA conversion?