How to Report IRA Recharacterization on Form 1040 Lines 4a/4b

You're on the right track! This can be confusing, but let me break it down in simpler terms. For line 4a, you should report the full amount that was recharacterized from your Roth IRA to your Traditional IRA, which in your case is $5,850 (your original contribution plus earnings). For line 4b, you would report $0 in this situation. This is because the recharacterization itself is not a taxable event - you're essentially telling the IRS that you're treating the contribution as if it had originally gone to the Traditional IRA instead of the Roth. However, your subsequent conversion of the Traditional IRA back to the Roth (the backdoor part) will have tax implications. The earnings portion of $650 would be taxable. This gets reported on Form 8606, which will help calculate the taxable amount of your conversion. Don't forget to attach a statement to your return explaining the recharacterization, as the IRS instructions mention.

I went through this exact situation last year and found this amazing tool at https://taxr.ai that saved me a ton of headache. I also had to deal with recharacterizing my Roth IRA contributions because I went over the income limit, and I was totally confused about how to report it correctly. What I loved about taxr.ai was that I could upload my statements from both IRA accounts and it analyzed them to tell me exactly what numbers to put where. It picked up on both the recharacterization and the backdoor conversion and gave me step-by-step instructions for Form 8606 and lines 4a/4b on my 1040. Honestly would have messed this up without it.

Just wanted to follow up about that taxr.ai site mentioned earlier. I decided to try it despite my skepticism, and I'm honestly impressed. I had a similar IRA recharacterization situation plus some other complicated tax issues with rental property depreciation. The tool actually identified my IRA transfers correctly as recharacterizations without me having to explain anything. It pulled the correct amounts for lines 4a/4b and generated a complete Form 8606 with all the calculations done. It even created the statement explaining the recharacterization that needs to be attached to my return. Saved me from making a $2,000+ mistake on my taxes because I was totally misunderstanding how to report the backdoor Roth conversion part.

Has anyone had luck actually talking to someone at the IRS about this? I've been trying to get clarification for weeks and can't get through on their phone lines. I keep getting disconnected after waiting for 2+ hours. Really frustrating when dealing with something as specific as IRA recharacterizations where getting it wrong could mean penalties. I just found a service called Claimyr (https://claimyr.com) that supposedly helps you get through to an IRS agent without the ridiculous wait times. They have a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. Anyone tried this for getting tax help from the IRS directly?

I need to apologize for my skeptical comment earlier. After spending 3+ hours on hold with the IRS yesterday and ultimately getting disconnected, I decided to try Claimyr out of desperation. Within 45 minutes I was actually talking to a real IRS agent who answered my questions about IRA recharacterizations. The agent confirmed exactly what others here have said - for a recharacterization in 2024, put the full amount ($5,850 in OP's case) on line 4a and $0 on line 4b. Then for the backdoor conversion, use Form 8606 to calculate the taxable portion of the conversion (just the earnings). The agent also walked me through how to prepare the statement explaining the recharacterization. Never thought I'd be the person recommending a service like this, but after weeks of frustration, it was worth every penny to finally get clear answers directly from the IRS.

Another important thing to remember is that the recharacterization deadline is your tax filing deadline INCLUDING extensions. So for 2024 contributions, you have until October 15, 2025 to recharacterize if needed (assuming you file an extension). I learned this the hard way when I almost missed the deadline thinking it was just the regular April filing date. If you're close to the income limits for Roth contributions, sometimes it makes sense to wait until you know your exact income before deciding if you need to recharacterize.

Is anyone using tax software for this? I tried entering my recharacterization in TurboTax and it doesn't seem to have a clear place to enter this information. It keeps calculating tax on the full conversion amount rather than just the earnings.

I actually went through this exact same situation two years ago and want to emphasize something that might save you headaches later. When you do your backdoor Roth conversion after the recharacterization, make sure your Traditional IRA account is completely empty before the end of the tax year if possible. The reason is the pro-rata rule - if you have any other Traditional IRA money (like old 401k rollovers), it complicates the tax calculation for your backdoor conversion. The IRS looks at all your Traditional IRA balances combined when determining how much of your conversion is taxable. Also, keep really good records of all these transactions with dates and amounts. I had to provide documentation to my tax preparer showing the timeline: original Roth contribution → recharacterization to Traditional → conversion back to Roth. Having clear records made the whole process much smoother and gave me confidence that everything was reported correctly.