Late + Incorrect Form 8606 for Traditional IRA

[Anonymous]

So, this is a bit of an unfortunate series of events.

1. After filing my 2021 taxes, I realized that this was the first year I claimed my annual $6000 contribution to my traditional IRA on my taxes when I should have been doing that since 2019. This year's taxes had both my partial deduction of $5760 as well as Form 8606. During the filing process, because I misunderstood the instructions, I entered $12,000 in line #2 thinking this was the total I had contributed in the previous years.

2. A few days later, I filed 1040-X for 2019 and 2020 for my previous years' contribution. My 2020 return had the full $6000 eligible, but my 2019 return was another year of partial deductions of $5640. I did not include Form 8606 with my 2019 return.

So at this point, I think I'm looking at a late/missing Form 8606 from 2019 and an incorrect Form 8606 in 2021.

What should my next steps be? Since my error is for the year 2021, should I file an amended 1040-X, even though it doesn't change my refund/or affect the rest of the numbers on my taxes?

My 2019 amended return has been received but not processed yet. Should I mail Form 8606 or wait for my amended return to be processed?

I'm new to the whole IRA thing, so this situation is a mess. The only upside is that there aren't any Roth IRAs or conversions to complicate the situation. Any advice/help is appreciated!

[fanfare]

@Anonymous 

If you amended for a partial IRA deduction in 2019, your 1040-X might be sent back to you for missing supporting form - namely Form 8606.

You should mail a corrected, signed 2019 Form 8606 to the same address you filed 1040-X and hope it links up to your 1040-X.

[Anonymous]

Thank you, @fanfare. I simply didn't attach any Form 8606 at all for 2019 1040-X. So if I mail it in before they amend/process my 2019 taxes, will that cause any issues? I was always told not to do anything like send in a second amended tax return until they've processed my original amended return, so I'm trying to be cautious. I do still have another year before the 3-year limit to 2019 is up, so I'm hoping those 16-20 weeks of processing for my amended return will be done before then. But I have heard of nightmare stories of people's amendments taking > 1 year to process.

I've also decided to send in an 1040-X for 2021 to correct the basis information I had and hope that they don't assess me any penalties, since I didn't take any distributions or do any roth conversions.

[fanfare]

I assume you are paying an additional amount you owe for 2021.

You will be assessed a penalty for paying late.

If you want to see how the IRS handles  your 2019 amended return, that's up to you.

Note that a correct 2021 Form 8606 is supposed to include the prior year basis from 2019 Form 8606 that you are currently holding in your hand.

[Anonymous]

I won't be paying any additional amounts in 2021 because my tax information did not change. Unless I'm missing something? All my calculations are still fine on the main 1040 form. It's just that I entered the wrong information on Line 2 of Form 8606 for my prior basis (because I had not done the 2019 Form 8606...) But it didn't change my partial IRA deduction in 2021 and did not result in any changes in taxes since I didn't do any roth conversions or take any distributions. My  main worry was the $50 penalty for late filing of 8606.

I guess I could try submitting just the Form 8606 alone for 2019? I know a lot of people do file the form separately. I just know that the IRS discourages filing a second amended return before the first one is processed.

[fanfare]

If you mail 8606 by itself, that is not an amended tax return.

In fact, according to this forum, IRS has been known to return such forms because they are not attached to Form 1040-X with an explanation.

 don't file a second amended return for either year.

[Critter-3]

Do not compound the error by filing a second amended return until the first ones have been fully processed.  Then if you still need to file the form 8606 it must be attached to a 1040X form or it may/could be rejected.