If you were making non-deductible contributions to a Traditional IRA, then the amount of any withdrawal is a combination of taxable and non-taxable. To calculate the taxable amount, you will need to know the amount of after tax contributions you made to the account. When you made a nondeductible contribution to a traditional IRA, you should have filed IRS Form 8086 with your tax return each year. Form 8086 documents your IRA basis so you know how much you have in nondeductible contributions.
TurboTax will automatically generate and fill out Form 8606 (Nondeductible IRAs) if you reported any of these on your tax return:
- Nondeductible contributions made to a traditional IRA
- Distributions from a traditional, SEP or SIMPLE IRA that had nondeductible contributions (excluding rollovers, conversions, recharacterizations, qualified charitable distributions, one-time distribution to fund an HSA, or return of certain contributions)
- Conversions from a traditional, SEP, or SIMPLE IRA to a Roth IRA
- Distributions from a Roth IRA (other than rollovers, recharacterizations, or a return of certain contributions)
You may need to update the amount of non-deductible contributions if you did not use TurboTax each year you made a non-deductible contribution, or if you didn't report the contribution.
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