Do I make an amendment for 2023 taxed because I recharacterized an excess contribution for Roth IRA?

Forum|Forum|1 year ago
July 25, 2024
2 replies
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I filed my 2023 taxes in March 2024 but then learned that I was no longer eligible to contribute to a Roth IRA because married filing separately.

I just recharacterized my 2023 contribution to a traditional IRA in July 2024. I will convert it from Traditional IRA to Roth as soon as I can.

Do I need to amend my 2023 taxes? If so, what do you recommend? I read the forums but haven't been able to fully understand.

Best answer by dmertz

Yes, you must amend your 2023 tax return to reflect the resulting traditional IRA contribution either as deductible on Schedule 1 line 20 or on Form 8606 as nondeductible. On Form 1040-X you must indicate that it is "Filed pursuant to section 301.9100-2" as described in IRS Pub 590-A.

fanfare

Employee

recharacterization: the original amount to the first IRA you report as contribution to the second IRA, earnings move but are ignored.
You must use a trustee-to-trustee transfer before the due date April 15,2024 or Oct 15, 2024 if 1040 was timely filed..
You will instruct trustee to calculate the allocable earnings.

report this on your tax return for the year during which the contribution was made.
Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA.

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You didn't state when the contribution was made.

IF your contribution was in 2023 you need to amend to specify if it is non-deductible (2023 Form 8606)

or deductible (2023 Schedule 1 Line 20)

@em451

dmertzAnswer

Employee

fanfare

Employee

according to my reading of 590-A

if the Roth contribution was made in 2024 for 2023, you don't amend your 2023 tax return.

@dmertz

dmertz

Employee

@fanfare , I think you are confusing this with a return of contribution. Recharacterizing a 2023 Roth contribution turns it into a reportable 2023 traditional IRA contribution which must be reported on the 2023 tax return. (A deductible traditional IRA contribution doesn't have to be reported, but if it's deductible, why not take advantage of the above-the-line deduction.)