Filing 8606 Line 8 - Tax Year vs. Calendar Year
Hi everyone, Here are some details on my situation:
I contributed $6000 to my traditional IRA as a non-deductible contribution in March of 2022. I converted that to my Roth IRA in early April 2022 before the 2021 tax year ended. However, I forgot to file a 8606 for the 2021 tax year. I understand I will need to pay a $50 penalty.
I contributed $6000 to my traditional IRA as a non-deductible contribution in early April 2023. I converted that to my Roth IRA in April 2022 before the 2021 tax year ended.
Here are some questions I had:
When I file my 8606 for the 2021 tax year, do I put $6000 in line 8 or do I put it in line 8 of the 2022 8606 form? I think my question essentially boils down to if the prompt for line 8 means calendar year or tax year.
If I need to add the 2021 conversion to my 2022 8606 form, then how does the IRS know my true cost basis? Does the IRS "see" that I didn't convert my 2021 non-deductible contribution?
I'm a little bit confused on Line 4 of the 8606 forms. I technically made my contributions before the tax year ended. So this tells me I should put 6000 for Line 4, but that would cause Line 5 to be 0, makes Line 10 = 0.00, and ultimately makes Line 17 = 0. The IRS instructions for form 8606 implies Line 4 is for anyone that made deductible traditional contributions, but Line 4 doesn't explicitly say that. Can someone let me know if I should put 0 for Line 4 in both my 2021 and 2022 8606 forms?
If I made my non-deductible contribution in March of 2023 (for the 2022 tax year), but did the conversion in May of 2023 with no additional non-deductible contributions for the 2023 tax year, then how does the IRS know that I have a cost basis of $6000 for the 2023 tax year? I am assuming the value put in Line 14 will be the Line 2 value for the following year I fill out a 8606. Can someone confirm?
Please let me know if you need any clarifications.
‎April 14, 2023
5:29 PM
