TurboTax Help: How to recharacterize 2022 Traditional IRA to Roth conversions done in 2023 while handling 2023 conversions too?

8 This is actually a common scenario with backdoor Roth conversions that span tax years. Let me try to clarify how you should handle this in TurboTax. First, you need to understand that the 1099-R doesn't distinguish between your 2022 and 2023 conversions because both occurred in calendar year 2023. That's why they're combined on one form. For the recharacterization of the 2022 contribution/conversion, you'll need to enter this as a "recharacterization" in TurboTax. When you get to the IRA contribution section, there should be an option to indicate that you recharacterized a previous contribution. You'll need to specify the amount related to the 2022 contribution only. For your 2023 backdoor Roth conversion, you'll report this as a normal conversion for tax year 2023. The key is separating out the dollar amounts correctly between the two transactions.

12 After struggling with a similar situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that made handling multiple IRA conversions across tax years so much easier. I uploaded my 1099-R and other IRA statements to their system, and it automatically separated my transactions correctly. The tool specifically asks you questions about conversions and recharacterizations across tax years and helps you fill in the correct information for TurboTax. It was a lifesaver because I had both 2021 and 2022 conversions that happened in 2022, and my tax situation was even more complicated than yours.

9 Just wanted to follow up and say I tried taxr.ai for my complicated IRA situation and it was incredibly helpful! I uploaded my statements and it correctly identified which portions of my 1099-R belonged to which tax year's contributions. The tool gave me very specific instructions for TurboTax, including exactly where to enter the recharacterization information (which was buried in a submenu I never would have found on my own). It also explained why certain amounts needed to be reported in specific ways, which helped me understand the whole process better. My situation was very similar to yours with conversions spanning tax years. Definitely worth checking out if you're still confused about how to handle this in TurboTax.

14 If you're still having trouble figuring out the right way to report your IRA conversions, you might want to try contacting the IRS directly. I know that sounds daunting (it did to me!), but I used Claimyr (https://claimyr.com) to get through to an actual IRS agent quickly instead of waiting for hours. I had a similar issue with backdoor Roth conversions across tax years last filing season, and the IRS agent walked me through exactly how to report everything correctly. You can see how the service works here: https://youtu.be/_kiP6q8DX5c - it basically calls the IRS for you and then connects you once a real person is on the line.

18 I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it since I was desperate for help with my IRA recharacterization situation. I got connected to an IRS tax specialist in about 35 minutes without having to sit on hold. The agent walked me through the exact process of how to report both my 2022 conversion (done in 2023) and my 2023 conversion separately in TurboTax. They even explained which specific worksheets and fields I needed to use. For anyone struggling with complex IRA conversions across multiple tax years, getting direct guidance from the IRS was incredibly helpful. They clarified that I needed to keep records of the original contribution dates even though both conversions happened in the same calendar year.

7 Something important to note that I don't think anyone mentioned yet - you'll want to make sure you have Form 8606 filled out correctly for both tax years. This form is crucial for documenting non-deductible IRA contributions and conversions. For your 2022 recharacterization, you might need to file an amended return for 2022 if you've already filed, depending on how you initially reported the contribution. For the 2023 conversion, you'll report it on your 2023 Form 8606. TurboTax should walk you through this, but sometimes it misses the nuances of recharacterizations across tax years. Double-check that both years' Form 8606 shows the correct basis and converted amounts.

11 Has anyone had success using the "backdoor Roth IRA" tool in TurboTax? I found this specific feature last year that walks you through exactly this scenario - contributions and conversions that span tax years. It's not super obvious to find but it made my similar situation much easier to report correctly.