Non-deductible IRA

[sandyp]

My husband and I are now retired and we took distributions from our rollover IRAs and our non-deductible IRAs (contributed 2009-2011).  We received 1099-R for four accounts.  I reported the last 8606 amounts from 2011.  Next TT asks me for total balance of Traditional IRAs as of Dec 31, 2019.  We do not have any Roth IRAs.  I added our balances from all four accounts (rollover and non-deductible for each of us) to the question when asked for total IRA balance.   Am I entering the correct balance?  So even though we chose what accounts to deduct funds from we can't reduce liability for the total amount taken from our non-deductible IRA's? 

[dmertz · Accepted solution]

You must enter your year-end balance in traditional IRAs and your wife's year-end balance in traditional IRAs separately.  IRAs are individual accounts, not joint accounts, and all calculations regarding the taxable amount of any of an individual's IRAs must be done entirely separately for each individual.

There is no such thing as a "non-deductible IRA."  All of an individual;s IRAs are treated as a single combined IRA for the purpose of determining the taxable amount of any distribution from any of the individual's IRAs.  It doesn't matter which IRA of the individual the distribution of a given amount comes from, the nontaxable and taxable amounts are the same.

[fanfare]

enter your own two 1099-Rs, and answer the followup questions with your basis and year-end value.

Then enter spouse's two 1099-Rs and repeat.

You'll end up with two of Form 8606 in your tax return.

[Lisa3588]

What Fanfare said.

Your non-deductible IRAs and rollover IRA are classified and included in Traditional IRAs. Enter all your 1099-R.  When TT asks for the total value of the IRA's, handle you and your husband separately.  You should have separate 8606 (one will be labeled 8606 Spouse).

The taxable portion of your IRA distribution will be a pro-rata amount based on the total of your non-deductible contributions to your Traditional IRA (including rollover) to your year end balance.