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New Member
posted Feb 6, 2021 12:01:17 PM

Where to get information on basis of distribution for retirement income

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1 Replies
Expert Alumni
Feb 6, 2021 12:16:20 PM

If you had a Non-deductible IRA or a Roth, your basis would be on your Form 8606.

 

Form 8606 for nondeductible contributions

 

Any money you contribute to a traditional IRA that you do not deduct on your tax return is a “nondeductible contribution.” You still must report these contributions on your return, and you use Form 8606 to do so.

Reporting them saves you money down the road. That’s because no individual’s money is supposed to be subject to federal income tax twice. Form 8606 gets it “on the record” that a portion of the money in your IRA has already been taxed. Later on, when you take distributions, a portion of the money you get back will not be subject to income tax.

 

Other uses for IRS Form 8606

 

The form is not just for reporting nondeductible contributions to traditional IRAs. You also use it to report other IRA-related transactions where the government needs to track the status of your money—whether it’s been taxed or untaxed. Form 8606 is also used when you:

  • Take distributions from a Roth IRA
  • Take distributions from a traditional, SEP or SIMPLE IRA at any time after you have made nondeductible IRA contributions
  • Convert a traditional, SEP or SIMPLE IRA into a Roth IRA