You will enter the recharacterization when you enter the contribution to the Roth IRA:
- Login to your TurboTax Account
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Roth IRA”
- Answer ‘Yes” on the “Roth IRA Contribution” screen
- Answer “No” to “Is This a Repayment of a Retirement Distribution
- Enter the Roth contribution amount
- 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.
- 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.
- 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.
TurboTax will add the 2024 Form 8606 with a basis on line 14 and this will be carried over to your 2025 return.
You will report the conversion next year on your 2025 return since the conversion happened in 2025.
You will get two 2025 Form 1099-Rs, one for the conversion usually with code 2 if you are under 59 1/2 and one for the recharacterization with code R:
- You will enter the 2025 Form 1099-R for the conversion on your 2025 return following these instructions (Step 2): How do I enter a backdoor Roth IRA conversion?
- A 2025 Form 1099-R with code R technically belongs on your 2024 return, but it won't change anything on your return when you enter it. You can only report the recharacterization as mentioned above. Therefore, you can ignore the Form 1099-R with code R when you get it in 2026.
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