Form 8606 is used to report your non deductible and deductible contributions. Read a complete discussion here.
https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/investments-and-taxes/what-is-irs-form-860...
Whether to contribute to a traditional or Roth IRA depends on many factors such as your expected tax bracket when you retire. Since your contributions now have no tax advantage, a Roth might be a good choice. Since you are a Vanguard client you might want to discuss this with your client representative.
