Roth IRA Recharacterizations

[sabrina.crone3]

I have a client that contributed to Roth IRAs for 2021 and 2022, which I did not find out about until June of 2022. I then directed him to recharacterize both the 2021 and 2022 contributions to non-deductible IRAs.

The 2021 tax return included a Statement of Explanation of the 2021 recharacterization, which included the $7,000 amount contributed and the balance transferred, which I was told to be $5,766.

However, when I received the 2022 1099 - R for the 2021 recharacterization, the amount reported is $9,783. This 1099-R amount does not show up on the 2022 tax return, line 4a of the 1040, which  makes sense.

The 2022 1099-R for the 2022 recharacterization is reporting the $5,766 amount. UGH! My understanding is the I need to include a Statement of Explanation on the 2022 return for the 2022 recharacterization, which I have done. So, that Statement will include also this $5,766.

Should I amend the 2021 return to report the correct amount on the Statement of Explanation of the recharacterization, from $5,776 to $9,783, or should I just let the client know if he gets any IRS correspondence we can provide the documentation to them at that time?

I am including a Statement of Explanation of the 2022 recharacterization.