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I have a traditional IRA from 2009 that had pre-taxed $3500. I have contributed it over the years claiming it on my taxes as a Roth IRA. How do I address this situation?

 
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2 Replies
LinaJ2020
Expert Alumni

I have a traditional IRA from 2009 that had pre-taxed $3500. I have contributed it over the years claiming it on my taxes as a Roth IRA. How do I address this situation?

If you did not withdraw any fund from your retirement plan including IRAs, you do not need to report on your tax return.  Usually when you take out money from your retirement plan, you will receive a Form 1099-R from the fidelity. 

 

Regardless of whether if a pre-tax or not contribution to your traditional IRA, if you have been taking a deduction on your tax return, you will very likely need to pay taxes on the distribution you make in the future.  You do not get a deduction for contributing to a Roth IRA.  You can only take deduction on the contribution you make to a traditional IRA. 

 

Upon distribution, all the non-deductible contributions you make to the traditional IRA are considered as basis.  Since you did not receive a tax break on your return, they are tax free when you withdraw the fund.  (This is the portion of contribution you make but not take a deduction on your return.)  For the contribution amount which you take a tax break on your return, at the time of the distribution, that part will be taxable.  To keep track on your non-deductible contribution and see how your distribution is taxable, you should be filing a Form 8606 Nondeductible Contribution. For details, click here: 

 

https://www.irs.gov/forms-pubs/about-form-8606

 

IRA distribution

 

I hope it helps.  Please write back with clarification if it does not resolve your issue.

 

 

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I have a traditional IRA from 2009 that had pre-taxed $3500. I have contributed it over the years claiming it on my taxes as a Roth IRA. How do I address this situation?

Are you saying that you have not reported you Traditional IRA contributions as either deductible or non-deductible?

 

What do you mean "reported a a Roth IRA" - how?  Roth IRA contributions are not reported on a tax return, only Traditional IRA contributions are.

 

If so, you have probably  missed the opportunity for a tax deduction and a larger refund unless your income is too high to deduct it.

 

You can amend 2017-2019 if you made contributions in those years if it results in a refund.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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