Forgot to offset RMDs with nondeductible IRAs. Do I have to amend previous years or I can I start using the original basis now?

[rwestinwa]

I forgot to use nondeductible IRA on prior returns 2018 and 2019 after taking RMDs. Do I HAVE TO amend the 2018 and 2019 returns or can I just start using the original basis for nondeductible funds now. The refund is less than $20 for 2018. 

Form 8606 was filed for years 1992-1997 for $2,000 each year (total $12,000); however, Form 8606 was not filed after that since there were no additional nondeductible contributions. Is that a problem? It seems you only file the form if you have nondeductible or use them somehow.  Thanks!

[dmertz · Accepted solution]

The basis applied to the distributions despite you not having claimed it, so you must prepare amended Forms 8606 to determine your remaining basis even if you do not submit amended 2018 and 2019 tax returns.  Some particular amount of basis was distributed even if incorrectly reported.  You do not have the option to distribute basis only when you want to, the tax code does not permit that, which is what you would be doing if you just tried to carry all of your $12,000 of basis forward to 2020.

Since you need to prepare the amended Forms 8606 and the change affects your tax liability,, there doesn't seem to be a good reason not to file the amendments.  Your amendments will each include Form 1040-X as well as the corrected Form 8606.

[rwestinwa]

Thanks for the quick response.  It was easy to go back and amend the two returns. Thank you!

[fanfare]

You  must be the first to find that doing amendment with TurboTax is easy!

Not to mention two of them !