Did not file form 8606 in prior years

[d-baril]

what do i need to do to report my basis if i never filled out form 8606

[re2boys · Accepted solution]

If you made a non-deductible contribution ( and in fact did not take any deduction on prior year tax returns ) and failed to file a Form 8606, you will need to go back and file a Form 8606 for each year this happened.  Be sure to get the proper 8606 for each year.  The information for each years 8606 is based upon information filed on the previous years 8606, if any, so you must start with  the first year you made these non-deductible contributions and work your way to the present time.  Recommend you take care of this immediately before you take any distributions. If taken distributions, those tax returns will need to be amended to properly show carryover of basis from year to year.

Per the instructions, you may be subject to a $50 penalty for each year in question for failure to file the form.  You may wish to include backup material such as you yearly Form 5498 and statements that show that the non-deductible contributions were made.

See the instructions for Form 8606:  https://www.irs.gov/pub/irs-pdf/i8606.pdf

[dmertz]

Forms 5498 will show that contributions were made, but that will need to be combined with the corresponding year's tax return to establish that no deduction was taken for the contribution.  This is probably why the IRS charges a $50 penalty for Forms 8606 filed late, to recoup the cost of verifying that a nondeductible contribution was actually made.

[PopPopBilly2810]

As background, we've been using Turbo Tax for many years to file our taxes.  My wife opened a Traditional IRA in 2014 and made non-deductible contributions to it.  Form 8606 was included in our Turbo Tax filing for 2014 and was correctly filled out.  However, Form 8606 was not included in our 2015 Turbo Tax filing even though non-deductible contributions were made to that IRA in 2015.  This also happened in 2018.  Form 8606 was included in our TurboTax filings for 2016, 2017, and 2019, but Turbo Tax entered $0 on line 2 (Basis) on each of these Forms (not sure why).  No additional non-deductible contributions were made to this IRA after 2019.  We need to establish Basis for this Traditional IRA as my wife has done a Roth Conversion on the entire IRA recently, and we will need to submit a Form 8606 as part of our 2022 Tax Return.  I assume that we will need to mail Form 8606 for the years 2015 through 2019 to the IRS, and pay a $250 penalty ($50 per year).  

My questions ...

How do we determine which IRS Office to mail these Forms to?

How do I ensure that Turbo Tax gets this right when we do our taxes for 2022?

What additional supporting documents should we submit to the IRS with the Forms 8606?

Please advise.  Thanks.

[fanfare]

@PopPopBilly2810 

It's unlikely IRS will impose the fee.

IRS will want to know you did not take a deduction for those contributions.

you will need Form 1040 for those years,

you don't send them in but have them in your records if IRS asks for them.

Send Form 8606 to the same office you would mail Form 1040.

[PopPopBilly2810]

Thanks for the reply.  I'm not sure why you would think that the IRS would NOT impose the $50/year fee, though.  The IRS.gov website seems pretty clear that if I did not submit the forms on time, I would have to pay the penalty fee.  I assume that this would apply to the Forms that I am resubmitting as revisions. 

[fanfare]

@PopPopBilly2810 

there is no penalty to amend a return with Form 1040-X and

submit a corrected/revised Form 8606 for any tax year.

No one to my knowledge has ever posted on the TurboTax forum that they were charged $50 for a late submission of a missing Form 8606.

Use Form 1040-X to add or correct information on an already filed tax return.

The IRS is also pretty clear in the instructions that Form 8606 can be filed by itself only if you are not otherwise required to file a tax return.

If you attach 20nn  8606 to 20nn Form 1040-X you won't have to sign 8606

NOTE: if no dollar amounts are changing, you should leave lines 1-23 on Form 1040-X EMPTY.