Recharacterization
Client did his own taxes on Tax Cut, and found out he had an excess Roth contribution of $1560. The Roth account (like most everything else) lost money in 2008. Rather than do the calculation and explain the difference, would it be safe just to RE the $1560 into a TIRA. Tax Cut said to file an amended return then to show the lower amount into the Roth.
Permalink Submitted by Alan Spross on Wed, 2009-04-15 21:05
Hi, Al.
if he has not yet done the recharacterization to a TIRA non deductible contribution, he could still file today and just add an 8606 for $1560, assuming that the TIRA portion cannot be deducted. Should also attempt to add explanatory statement without knowing the actual dollar amount that will move to the TIRA. He must then order the recharacterization prior to 10/15.
If he has already filed, then he could send in a stand alone 8606 to report the non deductible contribution, since this will not change any of the numbers on the 1040. Or, he could use the 1040X to add the complete explanatory statement of what happened, amounts and dates, and attach the 8606 to it.
Permalink Submitted by Al Fry on Thu, 2009-04-16 01:40
TKU, Alan. Had a great time in PHX and Tucson last month.