I took an early distribution from a traditional IRA. All funds were after-tax. How do I determine what is taxable?

[ymq4jmq]

I thought it was a Roth IRA until I got the 1099-R. I can see my investment amount $575. I can see my income amount and gain amount. Is there a simple math procedure I can do to create my own Form 8606?

[AmyC · Accepted solution]

If all the funds were after tax dollars, then only the interest earned would be taxable. You may have an early withdrawal penalty as well.

You can get the form and instructions at this link, About Form 8606, Nondeductible IRAs | Internal Revenue ... It is a straightforward form. The program will gladly create it for you.

What's the difference between a Traditional IRA and a Roth?

[fanfare]

file 8606 each year for after tax contributions to a traditional IRA, even if you thought it was a Roth IRA.

IRS may or may not  accept your excuse as reasonable.

To report your non-deductible contributions now, enter on Line 2 of form 8606,

and hope the IRS does not make an issue of it.

[fanfare]

Your 1099-R will not show your investment amount.

It shows the distribution amount.