I made a nondeductible contribution to my traditional IRA in 2022, but I did not file a 8606. Do I need to? Can I do it via turbotax even though I didn't use them then?

[julia-vu-ucsf]

I believe I made a nondeductible contribution to buy traditional IRA in 2022 (my tax return transcript that I got from IRS website shows IRA deduction - zero). However, I did not file a 8606 that year. Do I have to? If yes, then how can I do it through turbotax if I didn't use it file may taxes that year?

[MaryK4]

If you do not file a Form 8606 to indicate nondeductible contributions to your traditional IRA, the distributions will be taxed as if you had deducted the contribution when you withdraw the money.  (You will be taxed on the entire amount).   

You do not have to use TurboTax, as it will have to be mailed to the IRS separately.  You can get the Form 8606 (2022) and Instruction 8606 and complete the form and send it to the IRS.  Note there is a $50 penalty for filing late unless reasonable cause can be shown. 

[julia-vu-ucsf]

I used a CPA to file my taxes for 2022. I can’t find the tax return, but the tax return transcript on IRS.gov shows “IRA deductions” as blank, so I assume we didn’t take a deduction that year. I would’ve assumed we did, since we were below the income limit that year but if we did take the deduction, wouldn’t it show up on the transcript?  I can’t find a form 8606 anywhere on the IRS website so I can’t tell if it was filed by our CPA or not.

Is there a way to track down past years’ 8606?

[MindyB]

Yes, if you took the IRA contribution deduction it would show up in your transcript.  The transcript wouldn't necessarily show that an 8606 was filed, however, if the contribution was not deducted. If you can't get a copy of your return from your old CPA, the IRS will send you a copy of your return for $30. ‌You need to request this with a Form 4506.

To file an 8606 on your own, download the form from the IRS here: 8606

[julia-vu-ucsf]

Thank you! 

Hypothetically, if I made $4000 worth of deductible contributions to my traditional over a span of 4 years, and had gains of $2000 during that time, and wanted to do a Roth conversion of the entire amount today, would I pay capital gains tax on $2000 and federal and state income tax on $4000? 

On a different note, is it possible to do nondeductible contributions to a TSP account?

[fanfare]

to amend, you need to search prior years on IRS site for 2022 Form 8606.

Send it attached to Form 1040-X with year 2022 checked.

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

Part III explanation: "didn't include 2022 Form 8606 with e-File".

Done this way, you sign 1040-X, not 8606.
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.

@julia-vu-ucsf 

[DianeW777]

Yes, you would pay tax on the $6,000 in your traditional IRA when converted to a Roth IRA.  Since all of the original contributions were deducted, then all of the money would be taxed upon transfer to the Roth. This would not be considered as a capital gain, rather a distribution from a retirement account. Capital gains will not apply in this situation. 

For the question on nondeductible contributions to a Thrift Savings Plan (TSP) - this is a tax and retirement savings plan which allows for deductible contributions only. This plan is specifically set up for deferred tax treatment. This means when the money is distributed it will be taxed.

• Do I get a deduction for my 401(k) or TSP contributions?

@julia-vu-ucsf