I've been performing a self audit of my 8606 forms as I prepare for retirement (in 9 years). I have found in 2012 until present my non deductible contributions have been reported each year on form 8606, but my previous years basis in traditional IRAs was not. Since I've reported all my contributions each year, am I able to send an updated 8606 for the current tax year with the correct basis and that will solve this? What advice would you provide to clear this up? I've used turbotax each year.
Since I've reported all my contributions each year,
Your post is not clear. *How* did you report your non-deductible Traditional IRA contributions each year?
The ONLY way to report a non-deductible contribution is on a 8606 form that TurboTax generates automatically when you enter the non-deductible contribution.
If you reported the contribution are you sure that is was not deducted?
Yes if you make absolutely sure that the cover letter explicitly says there are more than one tax year involved.
Note that there is a $50 penalty for each 8606 form that is filed late unless you also state a reasonable explanation and request a waiver of the penalty.
My non-deductible contributions were reported each year on 8606, line 1 that Turbo Tax generates. My previous years basis was not reported on the 8606. Line 2 was not completed.
Hope that helps clarify.
Line 3 should have the sum of line 1 & 2. If there was no Traditional IRA distribution for the year then line 14 should be the same as line 3. The next years 8606 line 2 would come form the last 8606 filed, line 14.
If you use TurboTax each year and transfer the last years tax return then TurboTax should keep track of the prior basis in the "IRA information worksheet" line 12 unless you skipped a year or did not transfer.
There would not be a penalty since you did file a 8606- Amending a 8606 does not produce a penalty.