Common questions about 1099-R IRA Deductions in Lacerte

How to report a traditional IRA contribution

1. Open Screen 24, Adjustments to Income.
2. In the Section list, select Traditional IRA.
3. Enter 1 in IRA Contributions (1 = Maximum Deduction) to calculate the maximum deductible contribution allowed for the taxpayer and spouse (IRA worksheets).
4. Enter recharacterizations of taxpayer and spouse contributions in Recharacterizations.
5. Enter the IRA contributions made by the taxpayer and spouse in Contributions Made (Letter Use Only).
6. Enter other earned income and any amounts already entered in Other Income relevant to the IRA calculation that qualify as earned income in Other Earned Income [A].

How to report a recharacterization of a ROTH IRA Conversion

1. Open Screen 13.1, Pensions, IRA.
2. In the Form 1099-R list, select the payer.
3. In the Section list, select Form 1099-R.
4. Enter the full distribution in Gross Distribution.
5. Enter the taxable distribution in Taxable Amount.
6. Check IRA/SEP/SIMPLE.
7. In the Section list, select Form 8606.
8. Enter the distribution being converted to a Roth IRA in Traditional IRA Distributions Converted to Roth IRA.
9. Enter the amount to recharacterize in Recharacterizations.
10. Type in an explanation in Explanation of Recharacterizations (Ctrl+E).