Partially recharacterized rIRA contribution into tIRA - how to file on taxes?

[modulus]

So last December, I recharacterized part of my 2016 Roth contribution into a tIRA since it would drop me into a lower tax bracket.  The $1500 contribution from January 2016 I recharacterized had grown to $1688 by December 2016.  Last month I received a 1099-R from Vanguard with $1688 listed as the "distribution" amount on it.  Box 7 (distribution code) has an N there, which means "Recharacterized IRA contribution made for 2016 and recharacterized in 2016".  The original $1500 basis is not listed anywhere on this document.

I use Turbotax to do my taxes myself.  When filing this year, is there anything special I need to do?  Do I simply put I contributed $4000 to my Roth and $1500 to my tIRA, or will I need to do anything different since it was a recharacterization?  How do I also rectify the $1688 vs $1500 situation?  Thank you!

[DavidAnnArbor]

The $1688 just means it was transferred over from Roth to traditional.

There should be a box on your 1099-R that states it is non-taxable. Therefore you don't have to do anything.

[letthelightin]

I've had to deal with recharacterizations on my taxes before and the IRS instructions, though wordy, are pretty good at explaining how to handle them. The links below are where I got my info from.

Form 1040 instructions - pg 25, under "Lines 15a and 15b - IRA Distributions" (link here: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf )
Form 8606 instructions - pg 4, under "Reporting Recharacterizations" (link here: https://www.irs.gov/pub/irs-pdf/i8606.pdf )


Is the full $1500 you recharacterized deductible? If so, I believe this is what you need to do, based on what you told us. You may want to read the IRS instructions to confirm this is correct.

Enter the total distribution ($1,688) on line 15a of your 1040. Then attach a statement to your return explaining the recharacterization. Per the form 8606 instructions, the statement should indicate that you contributed $X,XXX to a Roth IRA on 01/xx/2016, recharacterized $1,500 of those contributions on 12/XX/2016 by transferring $1,688 (the contributions + earnings) to a traditional IRA in a trustee-to-trustee transfer, and that you deducted the traditional IRA contribution of $1,500.

I hope this helps!

[modulus]

I've had to deal with recharacterizations on my taxes before and the IRS instructions, though wordy, are pretty good at explaining how to handle them. The links below are where I got my info from.

Form 1040 instructions - pg 25, under "Lines 15a and 15b - IRA Distributions" (link here: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf )
Form 8606 instructions - pg 4, under "Reporting Recharacterizations" (link here: https://www.irs.gov/pub/irs-pdf/i8606.pdf )


Is the full $1500 you recharacterized deductible? If so, I believe this is what you need to do, based on what you told us. You may want to read the IRS instructions to confirm this is correct.

Enter the total distribution ($1,688) on line 15a of your 1040. Then attach a statement to your return explaining the recharacterization. Per the form 8606 instructions, the statement should indicate that you contributed $X,XXX to a Roth IRA on 01/xx/2016, recharacterized $1,500 of those contributions on 12/XX/2016 by transferring $1,688 (the contributions + earnings) to a traditional IRA in a trustee-to-trustee transfer, and that you deducted the traditional IRA contribution of $1,500.

I hope this helps!

This is great, thanks so much!