Form 8606 line 2-Nondeductible contributions basis

[wringer581]

I am using Turbotax for the first time.

I have made nondeductible contributions in prior years, and did so again in 2024.

I have not taken any distributions.

When I print form 8606, my current year contribution appears correctly on line 1, but line 2 (prior years' contributions (basis)) is zero.

How / where do I enter prior years' contributions to correct lines 2 and 3 on this form?

THANK YOU!!!

[DavidD66]

If you are using TurboTax Online, when you entered your Traditional IRA contribution, you should have been asked:  "Any Nondeductible Contributions to [name's] IRA?".  After answering Yes, the next page would have an entry screen for your nondeductible contributions (your basis) to your traditional IRA(s).  The amount you enter will appear on line 2 of Form 8606.  

If you are using TurboTax Desktop, switch to Forms mode by clicking on "Forms" in the upper right of your screen.  Once in Forms mode, you either 1) scroll through the list of forms and locate Form 8606, then click to open; or, 2) you can click on "Open Form" and then type in Form 8606, click on the form to open.  Below line 1 you will see a box with "Traditional IRA Basis Smart Worksheet".   Click on the "QuickZoom" to enter the total traditional IRA basis fort 2023 and earlier years.  Enter your basis on line 12 of Part III.

FYI, if you are filing a joint return, there will be two Forms 8606 in your return:  Form 8606-T is the taxpayer, and Form 8606-S is the spouse.  

[wringer581]

Hi David, and thanks for your reply on this.

I am using TurboTax online, and I had no problem entering my 2024 non-deductible contribution.

That number appears on LINE 1 (2024 tax year nondeductible contribution) of form 8606, as it should.

LINE 2 would come from the sum of PRIOR YEARS' forms 8606 (my existing basis before the 2024 nondeductible contribution).

But, because I did not use TurboTax in prior years, LINE 2 is $0, and it needs to have a value (it will be the sum of my 2022 and 2023 nondeductible contributions).

Others have posted with this same issue.

I found no place in the interview process to enter a value for this existing nondeductible-contribution basis.

If this cannot be resolved quickly, then I request authorization to switch to TurboTax Desktop where I can use the FORMS tool to manually populate this value (it will not affect any other numbers on my return, but it will provide accurate data for filing).

Thanks for your help.

[DanaB27]

If you do not get the “Any Nondeductible Contributions to Your IRA?” screen to enter your prior year basis during the IRA contribution interview then please see Why am I unable to report my 2023 for 8606 basis? to sign up for updates on this issue.

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
9. Enter your basis in the Traditional IRA from your 2023 Form 8606 line 14 (if you had a basis in the prior year)
10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

[Cindy77]

Thank you for these answers. I made non deductible ira contributions into a traditional ira from 2014 thru 2022. Never filed an 8606. Prior to 2014 i made deductible contributions. in 2024 i took my first ira withdrawal in 2024.  I would like to simply do a one time cumulative form 8606 catch up and include all prior non-deductible contributions in total on 2024 form 8606, line 1, would my basis on line 2 be 0 since there were no prior forms 8606 filed? TIA

[fanfare]

If you file with Line 2 = Zero, you have not accomplished your goal.

Amount on Line 1 cannot exceed $7,000, or $8,000 if you are over age 50 and cannot exceed Zero if you made no non-deductible contribution for 2024.

total basis for 2024 and prior years should end up reduced on Form 8606 Line 14 after doing the calculation for nontaxable part of your 2024 IRA distribution..

@Cindy77 

[fanfare]

Without prior year Forms 8606 on file, IRS may deny your Line 2 entry on a 2024 tax return,

if you cannot support it with acceptable documentation from your own records including evidence you did not take an IRA deduction in those years.

@Cindy77 

[Cindy77]

so a few suggestions were mentioned above. File a 1040X for years 2014-2022 as a cover with a 8606 attached? Is that the best route. will turbo tax let me go back and file for those years?

[fanfare]

If you state in  your 1040-X explanation that

you have  available on request satisfactory deposit  receipts, and Forms 1040 showing no deduction taken,

IRS may accept a bunch of Forms 8606 without asking you to produce those records.

Not counting the President, we're all on the Honor System here.

Note: when you are not changing any dollar amounts on your amending 1040-X, you can leave all the lines 1-23 EMPTY.

If you attach original return Form 1040 showing no deduction, write "COPY ONLY - DO NOT PROCESS" in bold at the top.

@Cindy77