How to Handle Backdoor Roth IRA Recharacterization and Conversion After Filing Taxes

What you're experiencing is a common confusion with Backdoor Roth timing and reporting. Let me break this down for you: For your 2023 contribution that was recharacterized and converted in 2024: The 1099-Rs you received are reporting the movement of money, not new contributions. Your original $7,500 was properly reported as a 2023 non-deductible traditional IRA contribution on your amended return using Form 8606. That establishes your basis. The recharacterization moved your 2023 Roth contribution to traditional, and the conversion moved it back to Roth. These transactions don't count as new contributions - they're just repositioning your original 2023 contribution. When reporting your 2024 taxes, you'll need to complete another Form 8606 to report the conversion that happened in 2024. This shows the IRS that you're converting previously taxed money (your non-deductible contribution), so you won't be taxed again on the conversion amount - only on any earnings that accumulated. Your 2024 Roth contribution of $7,500 is completely separate and has nothing to do with your 2023 contribution or the conversion. They're for different tax years. If your tax software is getting confused, you might need to adjust how you're entering the information or consult with a tax professional who understands Backdoor Roth transactions.

After spending hours trying to figure out my own backdoor Roth mess, I stumbled on https://taxr.ai which literally saved me thousands in potential penalties. They analyzed my 1099-Rs and immediately identified I was making the exact same mistake you are - the software was treating my recharacterization as a new contribution rather than a movement of funds. Their system automatically showed me how to properly report the recharacterization and conversion separately from my current year contributions. They walked me through exactly which boxes to check in my tax software so the 1099-Rs were properly coded as movement of prior contributions, not new money going in. The best part was they showed me how to properly fill out Form 8606 to track my basis across multiple years with all these transactions. My tax software alone couldn't figure this out correctly.

I was in that exact same boat as you with backdoor Roth confusion. After getting nowhere with my regular tax software, I tried taxr.ai based on recommendations here. Just want to say it actually worked! I had both 2023 contributions that were recharacterized in 2024 AND new 2024 contributions. The system immediately flagged my 1099-R codes and showed me that box 7 code N meant recharacterization (not new contribution) and explained how to enter it correctly. It pointed out exactly where my tax software was double-counting my contributions and how to fix it. Saved me from what would have been a $6,000 excess contribution penalty! My state was also treating the conversion differently than federal, which I had no idea about until their system flagged it. Definitely worth checking out if you're stuck in backdoor Roth limbo like I was.

If you're still struggling with getting the IRS to recognize your amended return or having questions about how the recharacterization should be treated, you might want to try https://claimyr.com to actually speak with an IRS agent directly. I spent weeks trying to get through to the IRS about a similar Roth conversion issue that resulted in incorrect 1099-Rs being issued. After trying for three weeks to reach someone at the IRS with no luck, I used Claimyr and got through to an agent in about 45 minutes. They confirmed exactly how to report my recharacterization and conversion across tax years and even noted in my account that my amended return was being processed so I wouldn't get an automated notice about excess contributions. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it basically holds your place in the IRS phone queue so you don't have to wait on hold for hours.

I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway out of desperation. Got through to an actual IRS tax specialist in about an hour (after trying for weeks on my own). The agent confirmed my amended return for my Roth recharacterization was received but still processing. More importantly, they explained exactly how to report my 1099-Rs for a recharacterization that happened in a different year than the original contribution. They put notes in my account so I won't get automatic letters about excess contributions while the amendment processes. The agent even sent me to a specialized retirement accounts department who walked me through exactly how to fill out Form 8606 correctly to show the basis tracking across tax years. Honestly shocked I actually got this resolved after months of confusion.

Something nobody has mentioned yet - check the distribution codes in Box 7 of your 1099-Rs. For recharacterizations, you should see code "R" or "N" depending on whether it's going from Traditional to Roth or Roth to Traditional. For the Roth conversion, you should see code "2". These codes are crucial because they tell the IRS (and your tax software) what type of transaction occurred. If these codes are incorrect on your 1099-Rs, you might need to contact your IRA custodian to get corrected forms. Also, make sure you're carrying forward your basis correctly on Form 8606 from year to year. Line 14 from one year becomes the starting point for the next year's calculation.

Quick tip from someone who's been doing backdoor Roth for years: In the future, consider doing your backdoor Roth contribution and conversion in the same tax year to avoid this mess entirely. Instead of contributing directly to a Roth when you're near the income limit, contribute to traditional (non-deductible) first, then convert to Roth shortly after (like a week later). This way, everything happens in the same tax year and you avoid the recharacterization complexity completely. It's much cleaner for tax reporting since you'll just have one 1099-R for the conversion in the same year as your Form 8606 showing the non-deductible contribution.

One thing that helped me when I was in a similar situation was to think of it chronologically and separate the transactions by tax year: **2023 tax year:** Your original $7,500 Roth contribution that you later amended to show as a non-deductible traditional IRA contribution. This established your basis. **2024 tax year:** The recharacterization and conversion are both 2024 transactions, but they're operating on your 2023 contribution amount. Plus your separate new $7,500 Roth contribution for 2024. The key insight is that you have $7,500 for 2023 and $7,500 for 2024 - totaling $15,000 across TWO tax years, not $15,000 in one year. Your tax software is probably lumping everything together as 2024 activity. When entering your 1099-Rs, make sure to specify that the recharacterization relates to a prior year contribution. Most software has a checkbox or dropdown for this. And double-check that your Form 8606 for 2024 is starting with the correct basis from your 2023 non-deductible contribution. If your software keeps showing an excess contribution error even after entering everything correctly, you might need to manually override or adjust how it's calculating your annual limits. Each tax year has its own $6,000/$7,000 limit, and your transactions span two different years.