Form 8606

[lkuchewi]

What do I do if I just found out that form 8606 exists and I have never filled it out even though I have had an IRA for years.  I only have balance information for 2018 and 2019 because it was rolled over from 1 vendor to another due to a change in the company handling it.  I originally had a Roth IRA, which was converted to a traditional IRA sometimes around 2014.  I don't have any balance information and was never sent any tax documents for the account after it was converted to a traditional.  I always check for tax documents, but nothing was ever available mentioning form 8606.  I obviously want to do everything correctly, but don't have the ability to fill out the form further back than 2018 and then what do I put in box 2 for the 2018 and 2019 forms?

[SusanY1]

First, be certain that you need to fill this form out for your type of Traditional IRA for the prior years.  Form 8606 is used for Traditional IRAs that have a basis due to nondeductible contributions, to track distributions from Roth IRAs, when pre-tax IRAs are converted to Roth IRAs.  

If you used a professional preparer or software to prepare your taxes previously, it is possible that you filed Form 8606 but simply do not have a copy of the form. 

I would first investigate this possibility by requesting transcripts from the IRS to get copies of any forms that may already be on file for you. 

There are three ways to request transcripts from the IRS:

1. Online - Get IRS Transcript Online.
2. By phone - 1-800-908-9946.
3. By mail - using Form 4506-T.

Once you know which year(s) are missing, if any, you can begin to compile what you do know and file the forms to the best of your ability.  Do the best you can with the information that you do know and can obtain.

Form 8606 can be filed independently of your tax return. 

There is a late filing fee of $50 for this form.  However, I would suggest that you include a cover letter with any late-filed forms asking the IRS to waive the penalty. 

Explain the circumstances that led you to learn about the requirement along with a statement about your intent to comply going forward.  For taxpayers with a history of compliance, waivers are very often granted.  No guarantee, of course, but no harm in trying!  

For Box 2 on the 2018 and 2019 forms - you should file these once you are able to complete your research on the prior year forms so that you can determine a reasonable basis.  If you are unable to determine ANY sort of basis, you would be required to use a basis of 0. However, I am confident with a little research you can untangle most of what you need to get a reasonably accurate basis (the amount of your post-tax contributions to the accounts.)

Here are links to the form and its instructions along with some general information about the form: Form 8606, Instructions for 8606, About Form 8606.

[fanfare]

If you never made a non-deductible contribution to your IRAs, the form 8606 is not used,