Reporting two way recharacterization in taxes

[taxfiler12341]

Filing Status: Married Filing jointly

My spouse had contributed to traditional IRA (full amount) in March 2024 for the year 2024. She later enrolled in a 403b plan from her company, so recharacterized the traditional IRA contribution (full amount) to Roth IRA in December 2024. We have received a 1099-R for this as it was done in 2024. I was able to enter this recharacterization in TurboTax by following steps outlined below (traditional to ROTH).

Now in March 2025, when preparing to file taxes FY2024, we realize that we are above the MAGI limit to contribute to Roth IRA. So, we are thinking of recharacterizing (the full amount) the "recharacterization to Roth" back to traditional IRA before the tax filing deadline. I am wondering how to enter this in turbo-tax (the "recharacterization to Roth" back to traditional IRA - basically as if the contribution was only made to traditional IRA) when filing returns FY2024.

For myself, I had contributed to Roth IRA in March 2024. Now in March 2025, when preparing to file taxes FY2024, we realize that we are above the MAGI limit to contribute to Roth IRA. So, I recharacterized the Roth contribution to Traditional IRA in March 2025. Though I haven't received a 1099-R for this yet (think I'll be receiving it only next year,2026) I was able to enter the recharacterization in turbo-tax by following the below steps. I suppose this is the correct way and I can just ignore the 1099-R I would be receiving for this next year. Is that correct?

I am trying to avoid needing to amend this return next year. So, looking for an optimal solution to this situation. Thanks!

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" 

[DanaB27 · Accepted solution]

Yes, you can ignore the 2025 Form 1099-R with code R when you get it in 2026. 

For your wife you can first enter a recharacterization to add the Explanation statement and then edit the entry to show just a Traditional IRA contribution. The statement will be still attached to the return.

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select “Traditional IRA”
4. Answer ‘Yes” on the “Roth IRA Contribution” screen
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Traditional IRA contribution amount 
7. Answer “Yes” to the recharacterized question on the “Switch from a Traditional To a Roth IRA?” screen and enter the contribution amount (no earnings or losses) on the "Tell us how much you transferred" screen.
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 to a Roth IRA in 2024. The contribution $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized to a Traditional IRA in 2025. 
9. Click "Back" and delete the entry on the “Switch from a Traditional To a Roth IRA?” screen and then continue through the questions.

[taxfiler12341]

Thank you so much @DanaB27 for the quick response! Just to be clear, the attachment with the explanation of the recharacterization would still get added to the tax forms even when we go back and remove the recharacterization amount, right?

Another question is that should 1040, 4a reflect the recharacterization amount from the recharacterization in December (for which we have received the 1099-R with code N)? After following the steps, the penalty screen went away. However, the item (1040, 4a) is blank on the tax form, so wanted to double check this. Also, I am only able to view the 1040 at this time (not the attachment) as I haven't completed all the steps in federal filing.

[DanaB27]

Yes, the attachment with the explanation of the recharacterization would still get added to the tax forms.

Yes, you will enter the From 1099-R with code N. You should show the amount from box 1 on line 4a.