topic I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution. in Get your taxes done using TurboTax

I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Sat, 15 Aug 2020 00:38:18 GMT

I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms and I was not aware of the form 8606 at the time and did not file a form 8606 for the IRA contribution. My IRA investment firm, Fidelity, however, generated an IRA contribution on their form 5498 which showed my IRA contribution in 2016. I learned of this the last few days.

Furthermore, I used the turbo tax software in 2016 which did not generate an 8606 for my IRA contribution after the turbo tax software was linked to my Fidelity account. The turbo tax however generated an 8606 for my wife but it did not generate one for me.

Please help. what should i do

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

Critter-3 — Sat, 15 Aug 2020 01:03:33 GMT

File one now ... it is a stand alone form : https://www.irs.gov/pub/irs-prior/f8606--2016.pdf

instructions: https://www.irs.gov/pub/irs-prior/i8606--2016.pdf

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 18:55:27 GMT

HI Critter-3, I m filling out the 2016 form 8606.

1)I entered my ira contribution of $3000 in line 1.

2)I entered $0 in line 2,

3)Entered $3000 in line 3 (line 1 minus line 2)

4) Instruction said to move number from line 3 to line 14 if there was no distribution or roth conversion in 2016.

5) I entered $3000 in line 14.

Part 1 is completed.

Question:

Is line 13 the FINAL step for me for filling out this 2016 form 8606 as I did not do any distribution nor roth conversion etc to this $3000.?? if it is, I can then mail this out today? Thanks

After the contribution of $3000 in the traditional IRA, the balance went from $3000 to $2600 within days due to my poor choice of stock investment.

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

Critter-3 — Wed, 19 Aug 2020 19:00:41 GMT

Line 14 is the end ... you are done. Sign page 2 and mail it in.

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 19:09:03 GMT

HI Critter-3, I m filling out the 2016 form 8606.

1)I entered my ira contribution of $3000 in line 1.

2)I entered $0 in line 2,

3)Entered $3000 in line 3 (line 1 minus line 2)

4) Instruction said to move number from line 3 to line 14 if there was no distribution or roth conversion in 2016.

5) I entered $3000 in line 14.

Part 1 is completed.

Question:

a) Is line 14 the FINAL step for me for filling out this 2016 form 8606 as I did not do any distribution nor roth

conversion etc to this $3000.??

b) Do i skip line 15 as it does not apply to me?

c) if line 14 is the final step , I can then mail this out today?

Thanks

P/S Apparently prior to my contribution in 2016, I did have a balance of $250 in my traditional IRA account. However, after the contribution of $3000 in the traditional IRA, the balance in my traditional IRA dropped to $2600 within days due to my poor choice of stock investment. I guess I would not have to worry about paying any negative interest as I was losing money. And at the end of the year of 2016, i lost more money and the balance in my traditional IRA was about 2,200

Please ignore my other similar message to this one

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 19:12:44 GMT

Thank you. I will work next on my roller over IRA which is even more of a sad story for me to share it here at a later time.

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

Anonymous — Wed, 19 Aug 2020 19:13:53 GMT

make sure you sign and date it. mail bu a method where you get proof of delivery. the ITS may send you a ypenalty notice for $50 for late filing. all this assumes your qualified to make the $3000 IRA contribution (you need $3,000 in wages or a net schedule C profit of $3,000)

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 19:16:02 GMT

One quick question,

Do i check this as a "amended return" on the form 8606 which is asked at section above part 1?

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 19:19:54 GMT

Hackitoff, I dont understand. I made a nondeductible IRA contribution and not a deductible contribution. Why should i not be qualified to make a nondeductible contribution? Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 19:24:00 GMT

Critter-3,

Since I never filed a 2016 form 8606 (because turbotax failed to generate one) and I am preparing a 8606 for the first time, do i have to check the little box asking if this is an "amended return" ?

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

macuser_22 — Wed, 19 Aug 2020 19:24:50 GMT

@ahbn41 wrote:

Why should i not be qualified to make a nondeductible contribution? Thanks

It would not be qualified if your taxable compensation was not at least the amount of the contribution whether deductible or non-deductible - the limits are the same.

The maximum IRA contributions for 2019 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

macuser_22 — Wed, 19 Aug 2020 19:32:10 GMT

@ahbn41 wrote:

Since I never filed a 2016 form 8606 (because turbotax failed to generate one) and I am preparing a 8606 for the first time, do i have to check the little box asking if this is an "amended return" ?

If not filed then it is an original 8606, not amended. Be sure you mail a 2016 8606 form. The 2016 non-deductible contribution should be on line 1. Any carry forward non-deductible contributions on line 2, the total of line 1 & 2 on line and line 14 (if there was also no 2016 IRA distribution).

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 20:04:50 GMT

i contributed $3000 in 2016. That was all I could afford for someone with a day job.

Am I qualified to contribute the $3000 to the traditional IRA in 2016?

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 20:12:17 GMT

Macuser wrote..."Any carry forward non-deductible contributions on line 2,.."

I do not understand this part, about "any carry forward..."

My balance in the traditional IRA in 2015 was about $250 which came from years ago (probably a contribution in 1990s that I do not remember.) The $250 was sitting there and forgotten all this time . Do i put the $250 on line 2?

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

macuser_22 — Wed, 19 Aug 2020 20:12:47 GMT

@ahbn41 wrote:

i contributed $3000 in 2016. That was all I could afford for someone with a day job.

Am I qualified to contribute the $3000 to the traditional IRA in 2016?

See my post above:

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

macuser_22 — Wed, 19 Aug 2020 20:16:18 GMT

@ahbn41 wrote:

Macuser wrote..."Any carry forward non-deductible contributions on line 2,.."

I do not understand this part, about "any carry forward..."

My balance in the traditional IRA in 2015 was about $250 which came from years ago (probably a contribution in 1990s that I do not remember.) The $250 was sitting there and forgotten all this time . Do i put the $250 on line 2?

Line 2 is not the IRA balance but any prior years non-deductible contributions reported of other years on a 8606 form for that year. The line 2 amount comes from line 14 from the last 8606 form that was filed.

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 20:20:07 GMT

Macuser_22,

You did not see or read my earliest posts. I intend to do backdoor roth conversion. My wife and i jointly filed. I am over 50s since 2016. I was told that my maximum NONdeductible IRA contribution is $7000. I contributed $3000 in 2016 and $2000 in 2020 so far.

I do not understand what you are trying to tell me. Please explain

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 20:26:55 GMT

Oh no. It was years ago, and I do not have good record of it. I contributed some monies in the 90s probably because someone at work said that I should.

Questions:

What should i put on line 2 then?

My fidelity investment has record up to 2013 and the balance was around $240 in 2013. Balance changed as stock price changes. In 2014 the balance was 245, and 2016 was baout $250. I do not remember my probably first tradditional IRA contribution amount becasue I no longer have any record of it.

Thanks

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

macuser_22 — Wed, 19 Aug 2020 20:38:37 GMT

@ahbn41 wrote:

Macuser_22,

You did not see or read my earliest posts. I intend to do backdoor roth conversion. My wife and i jointly filed. I am over 50s since 2016. I was told that my maximum NONdeductible IRA contribution is $7000. I contributed $3000 in 2016 and $2000 in 2020 so far.

I do not understand what you are trying to tell me. Please explain

Thanks

Read the IRS Publication.

The maximum that you can contribution is the LESSER of $7,000 OR your taxable compensation for the year. As long as you (and your spouse on a joint) return had at least $3,000 of taxable contribution the no problem.

(I was only answering your prior question about why you might not qualify by posting the IRS rules so yiu could read the "why" for yourself.).

Be sure to enter your $2,000 2020 non-deductible contribution in the 2020 IRA contributions section when doing 2020 tax next year, so that it will appear on line 1 of your 2020 8606 form. Your 2019 $3,000 nondeductible contribution (from line 14 on the 8606 that you are mail would be entered in the 1099-R interview when it asks for non-deductible contributions. That would go on line 2 of the 2020 8606 and the total of $5,000 would be on line 3 to offset the tax computed for the "backdoor Roth" on lines 6-15.

Re: I failed to report a nondeductible traditional IRA contribution on the 2016 tax forms, but invest firm generated a 5498 which showed the contribution.

ahbn41 — Wed, 19 Aug 2020 20:40:56 GMT

Macuser-22, I may have originally contributed more than $250 in my traditional IRA account in the 1990s. i bought stocks with the original contribution money, and of course i lost money because of the bad stock. All i can tell now through my fidelity investment record is that I have about $250 balance in my traddional IRA in 2015.

I do not have any record of this original traditional IRA contribution, what should I put down on line 2 of 8606.

Thanks