Traditional IRA 2023 Contribution Withdraw and Redeposit into the IRA Account - Do I report this on my Return?

[KauWai83]

Hello All,

During the course of 20222 and early part of 2023, I was depositing into my Vanguard traditional IRA account for year 2023 because I didn't know if my wife and I combined adjusted income would have exceeded the threshold  to deposit into my Vanguard Roth IRA account.  I determined that I could deposit into my Roth IRA for year 2023 when I was filing my tax return. I therefore did a withdrawal and redirected that amount into my Roth IRA before the filing due date of April 15, 2024. 

Vanguard provided a year 2024 Form 1099-R for the Traditional IRA account which shows  the distribution.   However, Vanguard didn't produce a year 2024 Form 1099-R for the Roth IRA.  How is this being handled and how could I tell that I'm not going to be tax on the distribution within the form 1040? I shouldn't right?

Hope I have explained my situation.

Aloha in advanced!

[VictoriaD75]

Did you take a distribution from the Roth IRA? The 1099-R from the traditional shows the withdrawal from that account. If you did not separately make a withdrawal from the Roth, you will not receive the tax document. The 1099-R is used for reporting distributions only, not the contribution from the traditional funds. If you are trying to report the conversion from a traditional to a Roth, see the instructions in the link below:

How do I enter a backdoor Roth IRA conversion?

@KauWai83 

[KauWai83]

Hi. I suppose the question is, do I get taxed on the traditional IRA distribution if I deposit it into my Roth IRA before the tax deadline? I did not perform a recharacterization.

[DanaB27]

What is the code in box 7? Did you inform you your financial institution that this was a return of contribution plus earnings?

Please see Return of IRA Contributions for additional Information.

[KauWai83]

It's an "R" in box 7. I actually did a recharacteriztion for years 2023.

[DanaB27]

You can ignore the 2024 Form 1099-R with code R since entering a 2024 Form 1099-R with code R on your 2023 return will not change anything in your return.

You should have reported the recharacterization on your 2023 return with these steps:

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 “Traditional 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 next 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.