401k and IRA contributions - amend return?

[steelrhino1]

I claimed IRA contribution deductions on my 2014 and 2015 tax returns, but I realized this year that this is not the same as contributing to an employer-sponsored 401K plan (which is what I entered from Box 12 "D" for both years).  Do I need to file amended returns that zero out those incorrect deductions?

[ChristinaS · Accepted solution]

Yes. If you reported a 401(k) contribution as a Traditional IRA contribution, that would have been a mistake. If you received an IRA deduction on your 1040, you likely will owe back taxes for these years. If you reported a Roth IRA contribution, its unlikely that this impacted your tax reporting. However, its also unlikely that you reported it as a Roth.

Please look at 2015 Form 1040, line 32 to see if there's an IRA deduction. If not, make sure you don't see Form 8606 with your return.

https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

[steelrhino1]

Thanks, Christina. Line 32 is blank on both years' returns.  There is a Form 8606 for me and my spouse for 2015 and one for my spouse only in 2014.  Do you think I will need to pay penalties on these amounts as well?

[ChristinaS]

No penalties. So you reported nondeductible IRA contributions? You should still amend to remove the reporting of contributions, but there's not much possibility of a change in tax. Where are the numbers on form 8606?

[steelrhino1]

Lines 1,3 and 14 on both 2014 and 2015.  Glad to hear about the non-penalties. Slightly panicked they're going to hit us for thousands of $$ in back taxes...!

[ChristinaS]

If you didn't get an IRA deduction, there's nothing to tax you on. People do get penalties for bad behavior in some cases, but this isn't an example of that. You just made a mistake, and didn't underpay your taxes. An amendment basically removing the 8606 will be suffice:-)

[steelrhino1]

Thanks so much for your help, Christina! I really, really, appreciate it!  🙂