There is no back tax. You can take care of this very simply without professional help. Since you did not deduct the contributions there is no need to amend. All you need to do is report the contributions that you did not deduct. That is done on a 8606 form that can be filed separately and not on an amended return. It is too late to amend for a refund.
You simply have non-deductible Traditional IRA contributions that you failed to report on a 8606 form at the time. While there is a $50 penalty for failing to file a 8606, I have never heard of the IRS actually assessing it if the 8606 is filed late.
Assuming that the first non-deductible contribution was made in 2011 and you had no prior non-deductible contributions:
All you need to do is
1) file a 2011 8606 with the $1,200 on lines 1,2,3 and 14.
2) file a 2012 8606 with the $5,000 on line 1, $1,200 on line 2, $6,200 on line 3, and 14.
That will be your basis in the Traditional IRA and will not be taxed (on a prorated basis) when a distribution is taken or converted to a Roth.
When you take a distribution and have a 1099-R to report it you will be asked if you had any previous non-deductible contributions, you would enter the last filed 8606 box 14 amount that would be prorated over the distribution and the total years end IRA value that will reduce the taxable amount or the distribution because of the previous after-tax non-deductible contributions.
Here are links to the necessary 8606 form and instructions for 2011 and 2012.
https://www.irs.gov/pub/irs-prior/f8606--2011.pdf
https://www.irs.gov/pub/irs-prior/i8606--2011.pdf
https://www.irs.gov/pub/irs-prior/f8606--2012.pdf
https://www.irs.gov/pub/irs-prior/i8606--2012.pdf
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
