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

[BBDTx2]

What is the difference between filing a 8606 and filing an amended return?  does an amended return avoid the penalty? 

I'm in the same boat as may - as I did my taxes on Turbo Tax each year, I never saw any indication that you must file the form even if there wasn't a deduction to be had.... so skipped it since I knew it wouldn't be deductible and thought that was the purpose of keeping your financial records! ("let's check for a deduction" didn't signal to me that I had to file regardless!)  

[fanfare]

@BBDTx2 

Use Form 1040-X to change or add information on an already filed tax return.
The Form should have been attached to your original Form 1040.

It's been posted here that IRS has been sending back standalone forms and asking for 1040-X.

It costs you nothing to report the missing 8606 on 1040-X.
If you aren’t changing any dollar amounts you originally reported, you don't have to do column A B C.
You aren't changing any dependents.

Just fill out the top and Explanation Part III

The blank form in fillable PDF format and its instructions are available at www.irs.gov.
For several years back anyway.
you would need 1040-X for each year.

The policy of IRS to apply the penalty, I can't comment.
I've never seen any post here that the IRS charged the $50.
--
I've always argued to put the missing total prior years basis on the current year form 8606 and
send in one form and be done with it.
I get a lot of pushback here on that suggestion.
Use your own judgement.
--
From 2017 IRS Pub 590A
"Failure to report nondeductible contributions. If you
don’t report nondeductible contributions, all of the contributions
to your traditional IRA will be treated like deductible
contributions when withdrawn. All distributions from
your IRA will be taxed unless you can show, with satisfactory
evidence, that nondeductible contributions were made. [my italics added]"

[mpinne]

Hi, 

What if I filed my form 8606 in 2020 but realized that the amount on line 2 was incorrect (accidentally left blank)? I corrected the prior balance in the 2021 return, but do I need to file an amended 8606 for 2020? 

There is currently an Explanation statement in the 2021 filing for my adjustment, but for some reason not for my spouses. Then, there is a blank form that explains both. Not sure how that happened.  What is the best way to fix this?

Thanks,

Marty

[fanfare]

put the missing total prior years basis (as adjusted) on the current year form 8606 and be done with it.
I get a lot of pushback here on that suggestion.
Use your own judgement.
--

[fanfare]

was the 2020 taxable amount correct or incorrect.?

If it was incorrect, you want to file an amended 2020 tax return with a correct 2020 Form 8606.

[mpinne]

Line 1 - nondeductible amount was correct.

Line 2 - total basis for some reason was $0 (incorrect), so

Line 3 - add 1 & 2 was incorrect and therefore

Line 14 - total basis was incorrect (only included the 2020 nondeductible contribution.

We've both contributed every year, they have never been deductible, we've had no withdrawals or Roth conversions. One year had a pension rollover into my IRA account.

Suggestions?

[fanfare]

you don't take a deduction for a non-deductible contribution, so your 2020 taxable amount was correct  as far as IRAs go.

[mpinne]

Right, it is just unclear to me if I need to amend the 8606 to provide the right historical info - a lot of the responses to the original post indicated 'yes', but it seems contradictory in places.

[macuser_22]

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@mpinne wrote:

Right, it is just unclear to me if I need to amend the 8606 to provide the right historical info - a lot of the responses to the original post indicated 'yes', but it seems contradictory in places.

---

This is an old thread from 2019 and has many different questions and posters.    What exactally do you need to correct?  

For what year(s)?

[mpinne]

I think I just need to fix the 2020 "opening total basis" balance (line 2) and Toal basis for 2020 and prior years (Line 14) to make sure my entire balance is correct. Should that be an amended 2020 8606 or is it "caught up" by the info in the 2021 return?

Separately, how do I change/replace the "blank" note that is explaining the reason for the change and/or combine it with the other note associated with 8606 that only explains my difference and not my spouses?

[macuser_22]

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@mpinne wrote:

I think I just need to fix the 2020 "opening total basis" balance (line 2) and Toal basis for 2020 and prior years (Line 14) to make sure my entire balance is correct. Should that be an amended 2020 8606 or is it "caught up" by the info in the 2021 return?

Separately, how do I change/replace the "blank" note that is explaining the reason for the change and/or combine it with the other note associated with 8606 that only explains my difference and not my spouses?

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Why do you think the line 2 amount is wrong.  Does it reflect the line 14 amount of the last filed 8606?

Not sure I understand your second question.  The 8606 is totally separate for each spouse.

[mpinne]

The 2020 Line 2 is wrong because it is $0 and doesn't reflect all prior contributions, and therefore Line 14 only reflects our 2020 contribution.

My second question is the fact that TurboTax created a "Explanation Statement" which includes my explanation for my 2020 being wrong. It separately created a "Blank Form" which includes an explanation for both my IRA (same as above) and an explanation for my wife's. It seems that these two explanations should be on the original explanation statement, but I'm not sure how they are created and therefore how to fix them and/or associate the "blank form" with the 8606.

[macuser_22]

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@mpinne wrote:

The 2020 Line 2 is wrong because it is $0 and doesn't reflect all prior contributions, and therefore Line 14 only reflects our 2020 contribution.

My second question is the fact that TurboTax created a "Explanation Statement" which includes my explanation for my 2020 being wrong. It separately created a "Blank Form" which includes an explanation for both my IRA (same as above) and an explanation for my wife's. It seems that these two explanations should be on the original explanation statement, but I'm not sure how they are created and therefore how to fix them and/or associate the "blank form" with the 8606.

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If this in in the IRA contribution interview it asks for any prior year contributions.   It only asks for an explanation statement if TurboTax has tracked contributions and you are changing the amount and then it only for the spouse that the contribution is for.

[mpinne]

I have an explanation for each spouse, which both show up in the "blank form", only my explanation shows up on the 8606 "explanation statement" - how do I get it so that each 8606 has the appropriate explanation instead of the blank form that isn't even next to the 8606 in the file?

[Nari12]

macuser 22,

I had a non deductible contribution of $6000 in 2021 to an IRA and I did the back door conversion right after. I repeat the back door conversion with the same amount in 2022.  Forms 8606 for 2021 and 2022  were filed by TT.

Now I have questions on the amount shown on these lines:

line 6 is blank in 2021 and 2022 

line 8 is blank in2021 and 2022

line 13  show $6000 in 2021 and 2022 (13 has an asterik)

line 14 show 0 for 2021 and 2022

line 16, 17 show 6000 in 2021 and 6000 in 2022

I have 1 penny in the traditional IRA account as of 12/31/22 and a positive account in Roth account.

Are these number correct for the second year?  I file the 8606 but each year the total basis is 0. ( actually it should be $0.01)

Thanks