Late filing of form 8606

You should file a Form 8606 for  2017 and 2018 (assuming your applied your 4/11/2019 contribution to 2018). You don't have to file an amended tax return, you can just file the Form 8606 by itself. 

Be sure to sign the form at the bottom of page two and use the correct year's form.

Click here for 2017 forms.

Click here for 2018 forms.

Technically you can be fined $50 for failing to file the form on time, but the penalty can be waived if you have reasonable cause.

Click here to learn more about reasonable cause.

Julie, thank you most sincerely for your expert reply.  I appreciate it very much.

To show reasonable cause, do I simply include a letter with the form 8606 that I mail in?  Or do I wait for the IRS to send me a bill?

It is best to send the request for reasonable cause with the Form 8606,

@1967jeff1967jeff

Thank you, Mary.

A different idea:  I actually don't mind paying the $50 dollar fee for filing a late 8606.  In fact, I'd prefer to pay it up front.  Would I then just include a $50 check with the lat 8606 that I mail in?

I would not send payment with the Form 8606, as it's unlikely the IRS will assess the fee.

No.  If in the unlikely chance that the IRS imposes the fee then they will send a separate bill - do not volunteer it.

Thank you all so very much.  It sounds like the right thing to do is to include not a check with the late 8606, but rather a letter.  If I may, does the below text sound good?  This would be for the letter enclosed with the 2017 8606:

I request a penalty waiver because I used ordinary prudence by relying on guidance from a credentialed advisor who turned out to be incorrect on this one matter.

This has just become clear to me, and I now take immediate corrective action. I do this in three ways. First, I file this 2017 8606. Second, separately I am filing a 2018 8606 for a nondeductible IRA contribution made in that year. Third, I will include a 2019 8606 with my 2019 Form 1040 to report a nondeductible IRA contribution in that year.

Thank you all again, most sincerely.

Yes, that correspondence to the IRS will work well.

Hi JulieS,

Thanks for your information.

What of when the nondeductible contribution to the Traditional IRA has earned some money (gain) e.g 7 cents, before converting to Roth IRA in a backdoor Roth IRA conversion; Won't I need to amend the tax return for that year?

Thanks in advance for your reply

for 7 cents I wouldn't.  did you know you can round forms to whole $'s.  49 cents or less rounded down to zero 50 cents or more rounded up to the next higher dollar. 

FYI ... general rules to follow when you plan to do a backdoor ROTH ...

1) ALWAYS have the contribution kept in a CASH account ... do NOT have it invested in anything that could make money not even a money market account

2) Give the broker explicit instructions to make the conversion as soon as possible per the institutions rules ... basically as soon as the ink dries.

3) This backdoor conversion ONLY works if the taxpayer has nothing in any traditional IRA account before or after the contribution/conversion. 

I used Vanguard,and in the traditional IRA the cash account is the settlement fund. Unfortunately it gained 7 cents by the time (which was the next day) their system allowed me to move the money into my Roth IRA account.

I also called them to move the money into my Roth IRA but I was told to wait for the money to settle before I could move it.

However for my first 8606 form which will be 2015 form 8606, on what line do I place the actual amount converted, the small earning of 7 cents e.t.c.

I'll need help in filling form 8606 for 2015, 2016, 2017, 2018 and 2019.

Thanks in advance for your reply

---

@fulanimary wrote:

I used Vanguard,and in the traditional IRA the cash account is the settlement fund. Unfortunately it gained 7 cents by the time (which was the next day) their system allowed me to move the money into my Roth IRA account.

I also called them to move the money into my Roth IRA but I was told to wait for the money to settle before I could move it.

However for my first 8606 form which will be 2015 form 8606, on what line do I place the actual amount converted, the small earning of 7 cents e.t.c.

I'll need help in filling form 8606 for 2015, 2016, 2017, 2018 and 2019.

Thanks in advance for your reply

---

No.   You enter the amount of the non-deductible contribution ONLY on the 8606 form.    Any earnings converted are taxable in the conversion by 7 cents rounds to zero.

If you also has non-deductible contributions for years 2015-2019 and did not file 8606 forms at the time then you must file a 8606 for each year.

Include  cover letter with an explanation and request a waiver of the $50 penalty  for each missed year.

You can obtain blank 8606 forms and instructions for each year here:

https://apps.irs.gov/app/picklist/list/priorFormPublication.html;jsessionid=e_Zqxthumq6fZ7BUHdhqodRz.21?value=8606&criteria=formNumber&submitSearch=Find

Hi macuser_22,

Thanks for your reply.

I've just noticed a major error on my 2019 tax return. I maxed my Traditional IRA as $6000 but it earned $1.55 before I converted to Roth IRA. Therefore $6001.55 was the actual amount converted

I e-filed my tax return through turbo tax but I've just noticed that: on my form 1040, my taxable income was listed as $502 on line 4b,and IRA distribution as $6002.

Also on my form 8606, turbo tax  left line 1 blank, then line 2 had $5500, line 3 had $5500, line was blank, line 5 had $5500, line 6 was blank ,line 7 had $6002 e.t.c

Looking at my form 8606 for 2019 tax return through turbo tax, certain things don't make sense.

Do you think I should just amend my tax returns?

It looks like there are 2 problems:

1) I you made a 2019 $6,000 non-deductible Traditional IRA contribution then you failed to enter it in the IRA contribution interview so that it would be on line 1 [edited] of the 8606.

2) If line 2 has $5,500 then that says that you have prior years carry forward basis of $5,500.  If line 1 has the $6,000 2019 contribution that it should had you entered it, then  line 3 would be $11,500 in the IRA.

But line 7 indicates that you only converted $6,002 and line 6 says that the year end IRA value was zero so  what happened to the line 2 $5,500?   

Did you also do a 2018 (or earlier)  conversion that was not reported correctly so $5,500 carried over?

Above edited - I typed line 2 when it should have been line 1.

Hi macuser_22,

Thanks for your patience with me.

Do you think I should amend my tax returns with all these errors?

Yes.

Any recommendations ?

Should i amend my tax returns using turbo tax?

Do you know how much turbo tax charges for amendment of tax returns?

Will there be a charge for each year or collectively for an amendment service?

I'm really worried now.

I'll have to use the most cost-effective way to resolve this problem

No charge to amend. But at I said above the missing 8606 forms can be file by themselves. 

 If the 2019 year end value of all Traditional IRA accounts was zero as indicated by what you reported on line 6 of the 8606 form then that dose not explain what happened to  the $ 5,500 on line 2.

If you entered the $5,500 as past basis from the prior 8606 forms not filed and did not use that basis for past distributions then this could get very messy and you might need to take all of your past records to a tax professional who can put it all together.  If you had previous years distributions/conversions then you might have paid too much tax.

You could just ignore the past basis and assume that it is zero and not file any past 8606, just amend 2019 to include the $6,000 on line 1 of the 8606 and enter zero for the past basis that puts zero on line 2.   Then the taxable amount of the 2019 $6,002 conversion will be $2,00.

=====

Online for 2018 ended on Oct 15, 2019. 2018 and earlier can only be amended with TurboTax using the CD/download version installed on a PC or Mac computer.

2019 amended Federal returns can either be e-filed or mailed. 2018 and earlier amended returns can only be mailed. It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS or state receives it.

See this TurboTax FAQ for detailed amend instructions:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

-- Amended returns can only be mailed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing.

You can check the status of the amended return here, but allow 3 weeks after mailing.

https://www.irs.gov/filing/wheres-my-amended-return

Hi macuser_22,

Can I talk to you on the phone?

Hope you don't mind.

No.   We don't do that.   If you want to talk to customer support then:

There is no single published number because it changes contently depending on the nature of the call and agent availability. Following the link below will either give a current number for you to call or take your number for a callback.

(Note that phone support is for paying customers only. There is no phone support for Free Customers.)

Here is a TurboTax FAQ for contacting customer support.

https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

Thanks for your reply.

I'm trying to fill form 8606 starting from 2015.

For 2015, line 2 (total basis in traditional IRAs) will be zero (0) since that is my first year of nondeductible contribution,and conversion to Roth IRA. I'm also below 50 years

Then for 2016,line 2 will be $5500,

Then for 2017,line 2 will be $11000,

Then for 2018 line 2 will be $16500,

Then for 2019 line 2 should be $22000.

Am I correct?

If I'm not correct, can you tell me what line 2 should be in each year starting from 2015.

I maxed my contribution in each year,and line 2 seems to be the line I don't understand in form 8606.

Thanks in advance for your reply

Line 1 is the non-deductible contribution for that tax year.   On the first 8606 line 1 would be the contribution amount, line 2=0, line 3 & 14 = line 1 plus line 2.

For each subsequent tax year line 2 is the amount form that last 8606 line 14.

As long as you did not take ANY distributions from a Traditional IRA then it will be additive like you show.