@User030620 wrote:
Got it, thank you. Looking at my return transcripts, I don't see a deduction for 2020, 2021, or 2022.
You can either file an amended return to make it deductible (depending on income and other facts) or file an amended form 8606 to make it non-deductible.
I want to make sure I don't under/over report my nondeductible contributions, as I plan to do a Backdoor Roth IRA conversion that would be reported for 2024 taxes (which is why I'm trying to get all my ducks in order right now for 8606s). What's the best way to calculate whether my contribution for a specific year was deductible or nondeductible, if I can't rely on past reporting?
But make sure you keep records of your contributions and your form 8606. You need to keep that for as long as you live (or until the IRAs are emptied out)
By records, do you mean my form 5498s from my IRA custodian?
I'm not sure I can help you much further. The taxpayer is required to keep their own reliable records documenting any adjustments to income. In this case, if you want to convert your IRA in 2024 and not pay taxes ("back door Roth"), you need to be able to prove to the IRS, if audited, how much of the contributions were non-deductible. You would normally do that by showing copies of your form 8606s, to prove that each year in question, your contributions were not deducted.
In other words, your proof that your 20xx contributions were non-deductible would be form 5498 from the trustee showing your contributions, and your 20xx tax return that includes schedule 1 with no deduction, and form 8606 showing you declared the contributions as non-deductible.
Now you need to prove that prior contributions were also non-deductible. That would mean form 5498, and your tax return with schedule 1 that does not have a deduction plus form 8606 showing the contribution was declared non-deductible.
So my suggestion is to go back to whatever non-deductible contributions you can prove. If that is 2020, then collect your 2020 form 5498 and tax return. If your tax return does not have form 8606 but should have, you can file form 8606 by itself since it has a signature line. Be sure to use the right year form. Then go to 2021. Add your prior non-deductible basis from the 2020 form 8606 to your 2021 contributions and make a new 2021 form 8606. Then go to 2022. Here you have an incorrect form 8606 that you will need to amend. Then go to 2023. Now you know the correct figure to include on line 2 (from the amended 2022 form 8606 line 14). Add your 2023 contributions and proceed with filing your tax return.
In case the IRS asks questions, be prepared to show your tax return, form 8606 and form 5498 for each year.
