Deductions & credits

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@whbunn wrote:

Yes, IRA box is checked.

 

I began withdrawals in tax year 2017 , RMD.  I failed to take into account my after tax contributions, so no 8606 generated.  My error.  After tax money put in over my working years 1975-2005.  Nor did I use 8606 for tax years 2018 and 2019.  I've made no contributions since I retired.

 

I did not fill out 8606 when I made first withdrawal tax year 2017 RMD.

 

While 1099R box seven is code 7 it is a 401k account.

 

I have tried using 8606 on duplicate file but I can't seem to get it to calculate pro-rated taxable amount.  When I switch forms the 8606 I filled in disappears.

 

What can I do?

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A 1099-R with the IRA box checked and a code 7 is a Traditional IRA distribution.

Did you actually contribute directly to a Traditional IRA or was this a 401(k) plan that you rolled over to a Traditional IRA?  

The first year that a non-deductible (after-tax) contribution to a Traditional IRA was allowed was 1987.   Any  non-deductible Traditional IRA contribution from 1987 to present MUST be reported on a 8606 form that that tax year in order to be used as basis now.   Any Traditional IRA distribution  must also be reported on a 8606 form for that year.    

If you made any Traditional, SEP or SIMPLE IRA contributions that were not deducted after 1986 then a 8606 for that year must be sent to the IRS or all basis will be disallowed.

If you had a Traditional IRA that had a after-tax basis and took distributions from a Traditional IRA in 2017  & 2018 then you need to amend those tax years to correctly calculate the taxable amount on a 8606 for those years.

NOTE that there is a $50 penalty for failing to file a 8606 for any tax year that was required.  (The IRS can waive the penalty if you provide a reasonable explanation).

You can download blank 8606 forms for 1987 to present here:

https://apps.irs.gov/app/picklist/list/priorFormPublication.html?indexOfFirstRow=50&sortColumn=sortO...