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Level 2

Question

IRA - Non Deductible Contributions

Forum|Forum|3 years ago
February 11, 2023
1 reply
0 views

Is there a max basis amount? Does it expire? How can it be applied in the future?

from 8606 line 14

Thanks for your input.

Level 15

No, your basis in the traditional IRA doesn't expire. Please keep the last Form 8606 for your records.

If you take a distribution/ make a conversion you will receive Form 1099-R and enter it in TurboTax. TurboTax will ask follow-up questions where you can enter the basis from line 14 of your last filed Form 8606.

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
Continue through the questions.
On the "Review your 1099-R info" screen click "Continue"
Answer "yes" to "Any nondeductible Contributions to your IRA?" since you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your last filed Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

Level 15

Since your IRA is tax-deferred your basis just hangs around waiting for some distribution, for example after retirement.

Then Form 8606 will be used again to calculate the non-taxable amount.

Level 15

you'll be much happier in retirement with a Roth IRA that is totally tax free,

rather than a Traditional IRA that is mostly not tax free and makes your Social Security taxable also.