Form 8606

Forum|Forum|6 years ago
August 20, 2019
1 reply
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Am confused about Form 8606 and I'd like to get clear. Everything here relates to traditional IRAs. In several of the last ten years TurboTax has generated a Form 8606 for us (married filing jointly) because I have been contributing to my IRA with varying success at earning deductions. Each of those forms seems to have just the "Total basis" for that tax year (which I guess means the non-deductible part). This past tax year (2018) my wife joined me in contributing to her trad IRA for the first time, but the 8606 only showed my non-deductible portion (all). I'm sure all of her contribution was also non-deductible.

1) Unless I misunderstand, shouldn't the Form 8606 be accumulating all our past years' amounts into one current amount?

2) Or do I have to keep track of the amount every year myself for reference when I start to withdraw?

3) How...or will I be prompted for my Form 8606 info when I begin to withdraw?

4) Do I need to amend or re-file my most recent 8606 for 2018 to reflect our total non-deductible contribution amount?

(FYI, after years of using Deluxe, this year I finally gave up trying to figure out the Deluxe functionality and started using Home and Business.)

Thanks! Sorry for length...

TurboTax Home & Biz Mac

VolvoGirl

Level 15

IRA stands for Individual Retirement Account. Do not add hers to yours. You would each have your own 8606 if needed. @dmertz

dmertz

Level 15

VolvoGirl is correct. Form 8606 is an individual form.

Line 14 of Form 8606 should show the entire accumulated basis in nondeductible traditional IRA contributions of the individual. You should see line 14 of the last filed Form 8606 for the individual carrying forward to line 2 of the next filed Form 8606 for the individual. If you transfer your previous year's TurboTax tax file into the current year's TurboTax to begin your current year's tax return, TurboTax will bring in your basis information and use it to populate Form 8606 line 2 for the current year.

For those married filing jointly, the modified AGI limit for being eligible to deduct a traditional IRA contribution is substantially different for the spouse who is not covered by the workplace retirement plan from the limit for the spouse who is covered by a workplace retirement plan. It's not uncommon for the spouse with active participation in a workplace retirement plan to be ineligible to deduct the contribution while the spouse without active participation in a workplace retirement plan to be eligible to receive a deduction for the contribution.

ctjAuthor

Level 2

@dmertz OK, as I mentioned to volvogirl, I feel like I'm getting somewhere.

Ah...Line 14. I didn't read the form closely enough to notice confirmation of my intuition around accumulation because all of my 8606s have the same amounts EVERYWHERE on the form. In other words, for each of my several 8606s, Line 14 reflects only that year's accumulation. So to be extra clear, the 8606 in my name (yes) for 2018 has the same current year's amount on Lines 3 and 14 and does not include any figures from my past 8606s. Line 2 on all my 8606s is zero. I have almost always carried over TurboTax from the previous year for the last 15 years maybe, but as I so alluded, the earlier years were on Turbo Deluxe which has gone through confusing and sometimes controversial functionality changes.

Both the wife and I are covered by retirement plans at work. That combined with our borderline income fluctuations around the income limits for deductibility sometimes makes us super ineligible for IRA deductions I guess...but TurboTax did not generate an 8606 for my wife this past year who made her IRA contribution debut in 2018.

1) How should I correct the non-accumulation on my current and future 8606s?

2) What should I do about the missing 8606 for my wife?

Thanks much!