Solved: I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???
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Returning Member

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

Thanks.  I always filed the 8606, just not correctly.  One of the complications was that I would make the contribution to the non deductible IRA in the next year (prior to April 15), allowable but not a good idea because it makes the documentation confusing.  So I’ve figured out how the 8606s should have looked.   The key things are that, I never paid tax on any distributions, and I always did what was allowed.  But it’s not documented correctly. So I could redo all of the 8606s that were wrong and submit them with an explanation -is there any potential harm in doing that(other than the $50, if that counts for wrong 8606)?

Returning Member

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

So line 15b was always zero , and I always got the refund I expected, no notices.  So I guess the IRS never noticed, which I suspect happens a lot.

Level 15

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

I see.  In exactly what way did you prepare the Forms 8606 incorrectly?  Did any show the proper carryforward from line 14 of one year's Form 8606 to line 2 of the next year's form?

Level 15

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???


@Stevehofwa wrote:

 One of the complications was that I would make the contribution to the non deductible IRA in the next year (prior to April 15), allowable but not a good idea because it makes the documentation confusing.


If you look at the 8606, is there a * next to line 15?   If so then the calculations were done on the "Taxable IRA deduction worksheet" and not the 8606 form.   While this seems to be contrary to the 8606 instructions, the IRS, on that worksheet (IRS Pub 590B worksheet 1-1) does seem to allow applying contributions before the due date the next year, to be applied to, and offset, the tax, on the current years distribution/conversion. 

 

You might not have any problem.

 

https://www.irs.gov/publications/p590b#en_US_2019_publink1000230851

**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.**
Level 1

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

Hi,

 

I was new to the country and failed to file form 8606 in 2019. I recently just mailed it in by itself to the Fresno California address (I live in Washington). I then e-filed my 2020 return using Turbotax where I included the 2019 IRA basis and got rejected. I'm wondering 1) should I wait a bit longer before I e-file so that the mailed-in 8606 could be processed? 2) is there anywhere I could check the status of the 8606 processing? 3) did I mail it to the correct address? I mailed to the regular 1040 address, not the amendment address. 4) is there any way I could e-file only the 2019 8606 form?

 

Thanks in advance for your answers,

Lin

Level 15

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

The rejection of your 2020 tax return had to do with a recent TurboTax bug, now corrected, not anything to do with your 2019 Form 8606.

Level 1

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

is the bug for the CD/Mac version too? That’s what I am using. The rejection did mention IRA so I don’t think it’s purely because of the bug. Are you saying they would accept my 2020 8606 without having processed 2019 8606? 

Level 15

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

If you have updated to the latest version of TurboTax, your e-filing should no longer be rejected as of sometime on March 5.

 

The e-filing rejection process for a 2020 tax return does not look at anything about your 2019 tax return.

Level 1

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

Thanks a lot! I tried again and got accepted 🙂

New Member

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???

Seems everyone's 8606 issues are special.  I've properly filed the 8606 each year required but with the wrong Basis, like so many others.  There is no change in any non-deductible contribution for any years from 2004 to 2015 to be corrected on the 8606.  Made no contributions, deductible or non-deductible since 2015.  No distributions have ever been made.  So, all those old form8606 are on "closed" tax returns.  Already filed my 2020 Tax return and it has been accepted.  Wanted to amend my return and add a 8606 with "0" contribution with the corrected Basis for 2020.  Shouldn't I just send a tax year 2020 form 8606 alone to the IRS with a written notice "this is corrected Basis from last filed 8606 in 2015"?  Can I send it with my spouses, since both have the wrong Basis, since there isn't any over or under payment of taxes for any year?   I want to get the basis correct this year as I'm planning some recharacterization of the non-deductible portion to a Roth IRA.  I just realized the Basis error this past month.

 

TurboTax doesn't have the 1040X ready at this time.  If needed, when will TT have the 1040X form?  there will be no changes on any line of the 1040X.

 

What is the simplest way to do this?  I have all past years 8606 with corrected Basis but worry about sending too much detail to the IRS.  Some posts just state to send the current year 8606 with that explanation.

Level 15

I neglected to file my non deductible IRA contributions on an 8606 for many years ....Is there anything I could do now???


@mip63 wrote:

Seems everyone's 8606 issues are special.  I've properly filed the 8606 each year required but with the wrong Basis, like so many others.  There is no change in any non-deductible contribution for any years from 2004 to 2015 to be corrected on the 8606.  Made no contributions, deductible or non-deductible since 2015.  No distributions have ever been made.  So, all those old form8606 are on "closed" tax returns.  Already filed my 2020 Tax return and it has been accepted.  Wanted to amend my return and add a 8606 with "0" contribution with the corrected Basis for 2020.  Shouldn't I just send a tax year 2020 form 8606 alone to the IRS with a written notice "this is corrected Basis from last filed 8606 in 2015"?  Can I send it with my spouses, since both have the wrong Basis, since there isn't any over or under payment of taxes for any year?   I want to get the basis correct this year as I'm planning some recharacterization of the non-deductible portion to a Roth IRA.  I just realized the Basis error this past month.

 

TurboTax doesn't have the 1040X ready at this time.  If needed, when will TT have the 1040X form?  there will be no changes on any line of the 1040X.

 

What is the simplest way to do this?  I have all past years 8606 with corrected Basis but worry about sending too much detail to the IRS.  Some posts just state to send the current year 8606 with that explanation.


No "easy" way.   8606 years do  not close like tax years do.

 

Incorrect 8606's can be amended and corrected as far back as 1987.

 

You need to fill out and mail a corrected 8606 starting with the first year of the error on the 8606 for that tax year.   Using the carry forward basis in  that 8606 to apply to the next years 8606.

 

You can mail them together with an explanation of why you are amending  them.  You should mail certified with return receipt since the IRS will not acknowledge any other way.

 

You can download blank 8606 forms for any year back to 1987 here:

 

https://apps.irs.gov/app/picklist/list/priorFormPublication.html?indexOfFirstRow=0&sortColumn=sortOr...

 

Also if you had a distribution for 2017 to present and had a distribution requiring a 8606 then you would need to amend that to report the correct taxable amount.

 

If you owe additional tax on Any distribution back to 2011 (10 years) you might also need to amend them -  the 3 year statute of limitations applies to tax owed to you, if  you owe additional tax the IRS can go back 10 years.  But the IRS would sent a letter if they require that.

**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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