Form 8606 not filed for previous non-deductible post-tax Traditional IRA contributions

[umamiking]

Hi, I have a Traditional IRA account that was rolled over from a workplace 401K in 2020. I have made two post-tax contributions to the account since then but didn't know about reporting it on Form 8606. I used TurboTax the last few years and I don't think I remembered to put the contributions in the program, so an 8606 probably wasn't generated automatically. For 2022 tax year (today), I went through the Traditional and Roth IRA section under Deductions & Credits and answered yes to Nondeductible Contributions to Traditional IRA from 2021 and prior, and recorded my contribution amount. I also entered my prior year Roth IRA contributions (prior to 2022).

Is this sufficient or do I need to file new Form 8606s for 2021?

[MinhT1]

If you made a nondeductible contribution to your IRA in 2021 and failed to file form 8606 with your 2021 tax return, You can fill out and file this form for 2021 now as a standalone form. You do not need to amend your 2021 tax return. You can send this form to the IRS at the address where you would file your tax return. This depends on your state of residence.

Please find the address in this IRS document.

If you fail to file form 8606, you will be taxed on the distribution of your nondeductible contribution.

There is a $50 penalty for filing the 8606 late unless you can show reasonable cause.

[umamiking]

Hi, I am in the process of filing a Form 8606 for 2021 but I am not sure I understand what basis I should use for Line 2? To recap, I've made a nondeductible contribution for tax years 2021 and 2023. 

"Basis. Your basis in traditional, SEP, and SIMPLE IRAs is the total of all your nondeductible contributions and nontaxable amounts included in rollovers made to these IRAs minus the total of all your nontaxable distributions, adjusted if necessary (see the instructions for line 2, later)."

For Form 8606 2021, is the basis just the contribution I made in that year, or would it include the total of all nondeductible contributions (2021 + 2023)? I did not take any distributions out of any account at any time.

[AmyC]

If this is your first year filing the form 8606, you would have no previous basis. Once you file 8606, you will file it every year. Each year, you add any new basis to the original. Since you are filing 2021, only basis for 2021 and prior years would be used. When you do 2022, you will use 2021 and add any new basis.

 

About Form 8606, Nondeductible IRAs - IRS:  

Otherwise, use the Total Basis Chart to find the amount to enter on line 2.

However, you may need to enter an amount that is more than -0- (even if this is the first year you are required to file Form 8606) or increase or decrease the amount from the chart if your basis changed because of any of the following.

You had a return of excess traditional IRA contributions (see Return of Excess Traditional IRA Contributions, earlier).

Incident to divorce, you transferred or received part or all of a traditional, SEP, or SIMPLE IRA (see the last bulleted item under Line 7, later).

You rolled over any nontaxable portion of your qualified retirement plan to a traditional, SEP, or SIMPLE IRA that wasn’t previously reported on Form 8606, line 2. Include the nontaxable portion on line 2.

[TaxWander]

I have a clarification here. I did a backdoor roth contribution. I reported the non deductible contribution in 8606 part 1 but forgot to fill out part II line 16 and 17. 
What impact would this have and do I need to resubmit a correction?

[Opus 17]

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@TaxWander wrote:

I have a clarification here. I did a backdoor roth contribution. I reported the non deductible contribution in 8606 part 1 but forgot to fill out part II line 16 and 17. 
What impact would this have and do I need to resubmit a correction?

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Yes, you need to amend to include that information.  For example, if you made a $7000 backdoor contribution and the bank assigned you $1 of interest, you either converted $7001 (so $1 is taxable income) or you converted $7000 (in which case you have $1 of basis left over).  Even if there was no interest at all, you need to put it in writing so the IRS can't come back to you later. 

[TaxWander]

Does that mean I send in an updated 8606 for 2023 or a 1040x ($0, there we no mistakes in the overall taxable income, the $1 interest was reported on the 1040)?

[SmallBusinessSurvivor]

I’m also interested in knowing how to fix this. Do I need to send in just an amended 8606 or can I ignore it?

[fanfare]

The proper way to file Form 8606 is attached to Form 1040-X.
Form 8606 can be mailed by itself only when you are otherwise not required to file a tax return.

Did you do a true backdoor contribution that is tax-free, or planned to be?
in that case Form 8606 will show a taxable amount of zero.
Do you have the correct taxable amount on Form 1040 Line 4b and did not take a deduction? (Schedule 1 Line 20)?
If that is all true then only Form 8606 has to be attached.
After you e-File,
get Form 1040-X from IRS website and mail it in with your <year> 8606, which you can also get in fillable PDF under "prior forms"..
Note: when you are not changing any dollar amounts on your amending 1040-X, you can leave all the lines 1-23 EMPTY.

Part II explanation: "didn't include Form 8606 with e-File".
Since e-File is closed, you will have to mail it.
Done this way, you sign 1040-X, not 8606.
Do not include your old 1040 nor your revised 1040 because they are identical.

If you took a deduction and now want to elect non-deductible,

your 1040-X dollar  amounts will not be zero, Schedule 1 Line 20 will be changed to -0-.

Still, do not include your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return.

@SmallBusinessSurvivor