Generally, you can recharacterize (correct) an IRA contribution by making a trustee-to-trustee transfer from one IRA to another type of IRA.
Trustee-to-trustee transfers are made directly between financial institutions or within the same financial institution. You generally must make the transfer by the due date of your return (including extensions) and reflect it on your return. However, if you timely filed your return without making the transfer, you can make the transfer within six months of the due date of your return, excluding extensions. If necessary, file an amended return reflecting the transfer (see Amending Form 8606, later). Write "Filed pursuant to section 301.9100-2" on the amended return.
A statement must be attached to your return explaining the recharacterization. This can be entered into the TaxAct program, and the return will still be eligible for electronic filing. See the IRS Instructions for Form 8606, Nondeductible IRAs, provide the most definitive guidance for reporting recharacterizations.
To attach a statement, follow the steps below.
Online
Dashboard
From within your TaxAct return, click Resources.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Under My Return, click Federal Search.
Click the Retirement Plan Income drop-down, then click IRA distribution explanation.
Complete the rest of the interview process.
Classic
From within your TaxAct return, click Federal.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Retirement Plan Income drop-down, then click IRA distribution explanation.
Complete the rest of the interview process.
Desktop
From within your TaxAct return, click Federal.
Click the Retirement Plan Income drop-down, then click IRA distribution explanation.
Complete the rest of the interview process.
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