On 4/13/2015 I had $3000 of my contribution recharacterized as a non-deductible contribution to an existing traditional/rollover IRA at Vanguard.
In my 2014 tax return, I included Form 8606 with $3000 entered on line 1. Line 15a of my form 1040 is blank, but the explanation for line 15a included with my tax return indicates:
- date of original contribution (11/19/2014)
- date of recharacterization (04/13/2015)
- the amount recharacterized ($3000)
- the amount transferred ($3000)
- Reason for the Recharacterization: income too high for 2014
Now I am doing my taxes for 2015 and after entering my form 1099-R, TurboTax says:
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It Looks Like You May Need to Amend Your 2014 Return Here's why: Your 1099-R reports earnings on a contribution you made in 2014. This information needs to go on your 2014 return. If you've already filed your 2014 return, then you'll need to amend it. Here's how.
I can kind of see why Turbotax is giving the warning: the amount transferred ($3136.78) does not match the contribution amount ($3000), however nowhere on form 1040 does it ask you for the actual amount transferred, except on the attached statement; form 1040 only asks you for the basis (i.e. original contribution amount). Given that, it seems the amount on form 1099-R will always differ from form 1040 if your investment appreciates in value before you make the recharacterization.