First of all, did you file a Form 8606 for each year you made a non-deductible contribution to, or took a withdrawal from your IRA? If not, you need to do so. IRS Pub 590-A states that any amount of nondeductible traditional IRA contributions not properly reported (i.e. on a Form 8606) will treated as pre-tax money in the IRA. Form 8606 can be filed by itself. If you don't have an updated Form 8606 that has been carrying forward in TurboTax, you will have to determine your correct cost basis and enter it on your Form 8606. While working in your return in TurboTax Online:
- Click on Tax Tools in the gray ribbon on your left
- Click on Tools
- Select Topic Search and type in IRA Contribution
- Click on GO
- Select "Traditional IRA"
- Continue through the questions until you get to the page "Any Nondeductible Contributions to Your IRA?"
- Mark "Yes" and Continue
- Enter your Total Basis as of December 31, 2023
If you took a distribution in 2023 and reported it on your tax return with a zero cost basis, you will need to file an amended return for 2023 in order to get the correct cost basis for 2024.
For information on how to amend a return, see the following TurboTax Article:
How do I amend my federal tax return for a prior year?
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