You choose $1,000 of your contribution in 2022 to be nondeductible. You enter the $1,000 on line 1, but not line 4, and it becomes part of your basis for 2022. If you file a joint return, enter only the name and SSN turbotax traditional ira to roth conversion of the spouse whose information is being reported on Form 8606. Forms 5498, IRA Contribution Information, or similar statements you received each year showing contributions you made to a traditional IRA or Roth IRA.

Jack must, therefore, recharacterize $475 ($400 + $75) to his Roth IRA. For tax purposes, the $400 will be treated as though he made it to the Roth IRA from the beginning. When you recharacterize an IRA contribution, you must transfer the contribution plus any earnings related to it. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years.

Backdoor Roth IRA: What It Is and How to Set One Up

When you convert from a traditional IRA to a Roth, it’s regarded as a distribution from your traditional IRA. Therefore, in Turbo Tax, you put it under an IRA distribution which adds to your income similar to declaring interest received or any other source of income. ttps://turbo-tax.org/ I have a question about re-characterizing if I choose to undo an IRA to Roth IRA conversion. I’d only being doing it if one of my investments made a huge upward move before the actual conversion was executed, leaving a larger than expected tax burden to contend with.

• You don’t have to file Form 8606 solely to report regular contributions to Roth IRAs.
• Personal state programs are $39.95 each (state e-file available for $19.95).
• Thanks for a great white paper on conversions.
• No sense paying the penalty if you don’t have to.
• But if I read your last sentence right, you can’t convert money received from required minimum distributions (RMD’s) – which I think is what you meant by “past 71”.

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How Can I Recharacterize an IRA Contribution?

There are probably special provisions that will affect the outcome one way or another. Does an inheritance IRA inherited from a non-spouse relative count against me in the pro-rata calculation or can I consider myself as having no IRAs if all I have is the inheritance IRA? All the contributions to the IRA prior to my inheriting it were pre-tax. Does it matter from whose traditional IRA we convert funds to our Roths?