Form 8606 Updates

[mattslegacy]

I just realized my mistake in not filing form 8606 in the past. In December 2017, I made a $201 nondeductible contribution to my Traditional IRA. I neglected to file from 8606.

A few days later at the beginning of 2018, I converted the money to roth. I then made several more nondeductible contributions to my traditional IRA totaling $2,399 for the year, and I converted everything over. I received a 1099-R for 2018, listing the total converted in the year, of $2,600.69. I also neglected to file Form 8606.

My understanding to fix this mess, is that I need to fill out Form 8606 for 2017, simply doing the following:

Line 1: $201, Line 2: 0, Line 3: $201, Line 14: $201. And that's it. Mail that in, and I don't have to amend 2017.

For 2018, Line 1: $2399, Line 2: $201, Line 3: $2600, Line 4: 0, Line 5: $2600, Line 6: 0, Line 7: 0, Line 8: $2600.69, Line 9:$ 2600.99, Line 10: .99973, Line 11: $2600, Line 12: 0, Line 13: $2600, Line 14: 0, Line 15a-c: 0, Line 16: $2600.69, Line 17: $2600, Line 18: .69 cents

Question 1) Do the lines on the Forms 8606 for 2017 and 2018 above look correct?

Question 2) Do I need to file an amended return for 2018? I have .69 cents taxable income from Line 18. Or can I simply submit the 8606 for 2018 as well. Thanks!!!

[JulieS]

No, you don't have to amend your 2017 or 2018 tax returns. You can just file the Forms 8606 for each year. Be sure to sign it on page 2 and mail it in to the same address you would use for a Form 1040. 

Your figures are correct, based on what you told me. I don't think that the IRS will require you to add the .69 to your income. 

[mattslegacy]

Thank you for the advice. Just to make 100% certain, this is what I'm reading onthe 2018 instructions for From 8606:

"Line 18
If your entry on line 18 is zero or less,
don’t include the result on Form 1040,
line 4b; or Form 1040NR, line 17b.
Include the full amount of the
distribution on Form 1040, line 4a; or
Form 1040NR, line 17a."

Therefore, wouldn't I want to file a 1040X, with $2600.69 on Line 4a, and $1 (the .69 cents rounded up) on Line 4b? This being the case, of my taxable income rising by $1?

[JulieS · Accepted solution]

If it makes you feel better, you can file an amendment for 2018 as well. The IRS considers less than $1 to be "de minimis", other words, the amount is so small, it is not worth the time and energy to report it.

[mattslegacy]

Thank you Julie! I'll trust your opinion, being a tax expert. I'll mail out the 8606, and hope they simply accept it and move on.  Thank you!

[JulieS]

Thanks!