You will still need form 8906 even if you only had a Roth conversion. The IRS uses this form to track "basis"—the money you've already paid taxes on—to ensure you aren't taxed twice on the same dollars.
You must attach this form to your 1040 for the 2025 tax year if you did any of the following:
- Converted any amount from a Traditional, SEP, or SIMPLE IRA to a Roth IRA.
- Made nondeductible contributions to a Traditional IRA.
- Took a distribution from a Roth IRA (unless it was a 100% qualified distribution).
- Took a distribution from a Traditional IRA and you have basis from previous years.
Failing to file Form 8606 can result in a $50 penalty per year, but the real cost is usually the accidental tax bill the IRS generates because they don't know you've already paid taxes on that money.
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