Form 8606

[R-GK]

"We were excused from taking a required minimum deduction in 2020 because of Covid, but we took RMDs in 2021."

Yes, this was so for us, with ongoing 8606. When TT imported from last year, it found my 8606 because I had a distribution, but not spouse's, who had none.

I typed his info manually, thought mine would automatically generate correct numbers, but TT hid all the calculations in Zoom sheets and the actual form to be filed had many blanks with asterisks. Since the IRS won't have the software to Zoom into the calculations, I'm going to over-ride them and type it in myself. 

Yes, we print them out every year, so we know the current basis. Sorry we ever did this, what a pain. Make a Roth instead.

[suramom]

This year i followed the instructions to do it within the IRA question and it did generate the 8606.  However it had seemingly random numbers on it, that i have no idea where it came from and no way to find out.  It changed my taxes in an odd way when i put in what i thought are the correct numbers.  I've always done it by hand before as part of the taxes, and i have no idea why it has these weird numbers.  Like telling me i took an RMD much larger than i did.  Any way to find out where these numbers come from?

[fanfare]

there is only one number that TurboTax keeps in its history if you used TurboTax over all these years.

That is your prior years basis Form 8606 Line 2 which comes from the history.

That should match your records.

IRS expects you to keep all your Filed Forms 8606 in your own records so these discrepancies don't arise.

[Still-puzzled]

^ But as a first-time user of TT Online (previously used an accountant -- no prior TT product), how do I get my old carryovers "into" TT without filing a new Form 8606?  I have carryovers for taxpayer and spouse tIRA basis and for taxpayer and spouse Roth conversion/Rollover basis.  These have just been swept along in the background for my "General Information" in my CPA's software.  Thanks!

[fanfare]

keep good records of your prior years basis and enter it when called for.

that would be in some future year, and expect then to have a new prior years basis.

[Morrisecat]

I tried to trigger a Form 8606 because a tax expert told me I'd need to submit it every year we had a basis. (She had me mail in thirteen 8606's for the years between the creation of the IRA and the 2020 conversion year.) In 2020 we converted a portion of the traditional IRA to Roth IRA and TurboTax created an 8606 to reflect the amount that was not taxable (old combat pay rolled into the IRA long ago).  In 2021 we neither contributed nor converted any amount from the IRA.  Should TurboTax have created a 2021 Form 8606?  I tried to trigger it as noted here in the Community.  If it should not have because we didn't touch the IRAs in 2021, do I just keep the 2020 Form 8606 and update from that the next time we convert the IRA with no 8606 forms for the years in between?  Or do I need to file Form 8606 for every year we have a basis even if we've had no new activity during that year?

[jtax]

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@Morrisecat wrote:

 If it should not have because we didn't touch the IRAs in 2021, do I just keep the 2020 Form 8606 and update from that the next time we convert the IRA with no 8606 forms for the years in between?  Or do I need to file Form 8606 for every year we have a basis even if we've had no new activity during that year?

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As lawyers say "show me the authority." It is very hard to evaluate the soundness of  advice without a citation.

When a particular form is involved, a good place to start is the instructions for the form.

You only need to file an 8606 when you have a distribution from an IRA with basis. Distribution here includes a withdrawal, a conversion to a Roth, or sometimes for transfers of IRAs between spouses during a divorce. (There are some more requirements if Roth IRAs are involved.)

I would keep all of the 8606s but you are probably ok with just the last one filed.

see "Who Must File" on the first page of https://www.irs.gov/pub/irs-pdf/i8606.pdf

[jtax]

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@Still-puzzled wrote:

^ But as a first-time user of TT Online (previously used an accountant -- no prior TT product), how do I get my old carryovers "into" TT without filing a new Form 8606?  I have carryovers for taxpayer and spouse tIRA basis and for taxpayer and spouse Roth conversion/Rollover basis.  These have just been swept along in the background for my "General Information" in my CPA's software.  Thanks!

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Good questions. I find it much easier to find the right place for this in the PC/Mac download software. See below for the IRA worksheets. 

For Traditional IRA basis (in either download on online), TT will ask you about your IRA basis after you enter any 1099s. See the first screenshot below. Answer yes and TT will let you input your basis and even help you figure it out. (Except for inherited IRAs).

Perhaps someone else can tell you where to find the roth contribution carryover entry area from the interview,

[dmertz]

"a tax expert told me I'd need to submit it every year we had a basis."

The tax expert was wrong.

To reiterate what jtax said, the IRS says that Form 8606 should only be included when there is an addition to or consumption of basis, or there is a Roth conversion to report.

[a7035477456]

(delelte duplicate posting)

[a7035477456]

AHHHH, this is how you get TurboTax to generate 8606: Answer YES to "I made and track non-deductible contribution to my IRA", AND enter your full address.  However note when e-file or printing, TurboTax still does not print form 1099-R nor 8606.  Until Turbo generates it, I simply to the IRS website and download 8606 and fill it out myself.  Youtube has a video showing how filling out 8606 is very simple.  Next file Amend 1040SX and print and attach 8606.  Amend is not a big deal, only print 1040sx and 8606, a few pages.  When you retire, you need all the 8606 to show the total basis and don't pay tax on the distribution.

While we here, I am because you doing  Backdoor Roth. If so, make sure you follow change box 7 "2" (you be tax 24% on $7,000) to "G"/"N" (you won't be tax on 24% on $7,000, hench "Backdoor Roth", wala) on 1099-R to avoid being double Taxed !!! Verify by 1040 entry 4b should be $0 (or empty).

[fanfare]

There's no reason to change Box 7

Code "H" is for a Rollover.

You're not doing a Rollover you're doing a conversion.

Code H will result in an incorrect Form 8606 attached to your tax return.

[dmertz]

Code 2 must NEVER be changed to code G!

These two codes are used for entirely different transactions.  Code 2 with the IRA/SEP/SIMPLE box marked is the correct code for an in-house Roth conversion from a traditional IRA.  Basis in nondeductible traditional IRA contributions is applied on Form 8606 to calculate the taxable amount of the Roth conversion.  If the year-end balance in traditional IRAs is not zero, and the sum of the year end balance and your distributions from traditional IRAs, including the Roth conversion is greater than your basis, some amount, perhaps a large amount, of the Roth conversion will be taxable.

I'm not sure why fanfare mentioned code H, but as fanfare said, code H has nothing to do with a backdoor Roth.  Code H is only for reporting a rollover from a designated Roth account in an employer plan like a 401(k) to a Roth IRA.

[Taxruss2548]

I converted some of my traditional IRA distributions to Roth IRA in 2021.  How do I get the form 8606 created I turbo tax.

[jtax]

@Taxruss2548 If you're using the Desktop PC/Mac software it is trivial. Just go to the View menu and choose forms. 8806 (and all used forms) will be on the left. You can also use the keyboard shortcut control-2

If you're using the online TT, the you can only see the forms as part of a print preview. Here's the FAQ on how to do that.

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...