r/tax•
rejectrash

IRA Recharacterization and Form 8606

I'm second guessing myself on if I did this correctly last year and for this year.

In Feb 2023, my spouse and I each contributed 6500 to our individual Roth accounts since we were normally under the income limit. My husband ended up selling some stock though that pushed us slightly over the income limit, which I discovered while filling out our 2023 taxes.

We each did a recharacterization on April 1, 2024. I moved my recharacterized money to an empty traditional IRA. My husband already had created a rollover IRA in 2023 when we rolled over some money from a previous job, so he moved his recharacterization there.

I converted my all my money back to the Roth also in April 2024. And my husband decided to just leave his in the rollover IRA.

When doing our 2023 taxes in April 2024, I filled out a form 8606 for each of us, lines 1, 3, and 14 had the $6500 amount. Did I do this right? Did the rollover amount that my husband had moved in 2023 have to be mentioned here as well?

We also each had a Federal Form 1040 Line 4a - IRA Recharacterizations statement done to show the Roth to Traditional IRA with the date of original contribution, the date of recharacterization, and the amount recharacterized (6500), and the amount transferred along with the reason.

Was this all that was needed? We now have our 2024 1099-Rs (box 7 code R). Do I just file these?

For our 2024 taxes, I also have a 1099-R (box 7 code 2) which I included in my filing and as expected I will be playing taxes on the gains I had above 6500. That part seems straightforward. My husband left his recharacterization in the rollover IRA, so do I need to do anything additional in the filings for this year for his side? I assume not since he will be taxed upon withdrawal from that account when he retires?

Posted Apr 15, 2025, 7:24 PM UTC

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