Did not file all my 8606 forms

[topmiller]

Unfortunately, I missed filling out 8606 form for a number of years that I made after tax contributions to my rollover IRA.  My understanding is that I can still fill them out now for the missing years and pay $50.  I do have 5498 forms and financial statements showing the contributions for most of the years.  Questions.  Do I need any other documentation for missing 8606 forms?  What do I do for the couple of years that I don't have documentation?  Can I go ahead with any rollovers or distributions without sending in the 8606 forms to the IRS and then complete them if they request them?  Thanks in advance.

[fanfare]

IRS is not going to request a Form 8606. You are responsible for filing those forms in the applicable tax years.

The proper way to file Form 8606 is attached to Form 1040-X.
Form 8606 can be mailed by itself only when you are otherwise not required to file a tax return.

Do you have the correct taxable amount on Form 1040 Line 4b and did not take a deduction? (Schedule 1 Line 20)?
If that is all true then only Form 8606 has to be attached.
After you e-File,
get Form 1040-X from IRS website and mail it in with your 8606, which you can also get in fillable PDF.
Note: when you are not changing any dollar amounts on your amending 1040-X, you can leave all the lines 1-23 EMPTY.

Part III explanation: "didn't include Form 8606 with e-File".

Done this way, you sign 1040-X, not 8606.
Do not include your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return.

@topmiller 

[topmiller]

Thank you for your reply.  Looking at the years I did turn in the 8606, the basis is not correct because of the skipped years.  So, I guess I have to do all 31 years? And for those incorrect years under part III explanation indicate the 8606 basis was not, correct?
Thanks!

[fanfare]

File one 8606 for the most recent year you made a contribution (presumably, 2023 ?)

Enter the correct amounts on Line 1 and Line 2.

Explanation: Did not include Form 8606 with tax return.

Your record will then be up to date.

If IRS raises and issue (unlikely), you can deal with it later

Your collection of Form 5498 records becomes invaluable in case of an IRS question.

@topmiller 

[fanfare]

Exactly how many years did you fail to include a Form 8606?

What is the prior year basis on the last 8606 filed, and how much is the cumulative error?

@topmiller 

[topmiller]

Out of the last 25 years it looks like I failed to include an 8606 5 times.  I have 5498 for all but 5 of those 25 years but in those years, I have an 8606.  Previous to that I do not have tax forms saved but I do have Schwab statements for all those years that show an IRA contribution of the maximum amount for that year and one 5498.  I have always taken a non-deductible IRA.  This issue started in 2007 when I put in a cost basis of $0.  Before that the 8606 look to have the correct basis.  Not sure why that happened. I guess I didn't transfer from the previous year in Turbotax.  I really think they should make the 8606 a required entry and if no IRA was contributed a person puts in zero.  Then Turbotax will make sure the history is transferred when the previous year is imported.

The prior year (2023) has basis of 7000.  For 2023 I contributed 7500 so the current cost basis reported should be 14500.  This makes the error to be 137000.  Hopefully not big enough to trigger an audit.

I've always read that I only need to keep the last 7 years of records.  In this case that is bad advice.  I guess that's what I get for working 48 years straight and paying taxes.  Sorry for the diatribe.

[fanfare · Accepted solution]

"For 2023 I contributed 7500 so the current cost basis reported should be 14500. "

that statement would be true if 

"The prior year (2022) Form 8606 showed a basis of 7000. on Line 14 "

A correct 2023 Form 8606 would show a prior basis of all contributions up to and including 2022

and a contribution of 7500 on Line 1 

The discrepancy is then  (  $total contributions up to 2022 - $7,000 )

In other words your 2023 reported basis is changing from $7000 + $7500 to

$total contributions up through 2022 + $7500.

It seems simplest to file only a correct 2023, as I suggested earlier.

If IRS accepts the suggested explanation, they may not bother to look for any discrepancy on earlier forms.

@topmiller 

[topmiller]

2022 was one of the 8606 I did not submit.  I put in 7000 on 2023 tax year 8606 form because a know I contributed 7000 for the 2022 tax year based on the 5498 I had.  This whole mistake was because of my lack of understanding the 8606 form.  I thought the basis was just the previous year's contribution.  I will put that in the explanation with the 1040-X and corrected 8606.  Thanks!