topic Can I skip track nondeductible ira contribution (Form 8606) for a year when do tax for roth convertion? in Retirement tax questions

Can I skip track nondeductible ira contribution (Form 8606) for a year when do tax for roth convertion?

xlian001 — Tue, 04 Jun 2019 20:42:57 GMT

Conversion from IRA to Roth IRA is taxable. I had some nondeductible IRA contribution before Roth IRA available. So when I did some IRA conversion, the nondeductible part of traditional IRA had been tracked with Form 8606, and the taxable amount reduced. I wonder if I can skip this tracking for a year or two, and pay the full tax for Roth conversion.

For example, I have IRA conversion in 2016, and I want to skip the 8606 form, and pay the full tax for the Roth conversion in year 2016. If I convert to Roth IRA in 2017 I want to track nondeductible IRA again, I would use the previous year's 8606 form (for tax year 2015 in this case), as the Total Basis in Traditional IRAs. Does it work this way?

Thanks for any advice.

Advice: it doesn't work that way; you can't do that. You...

fanfare — Tue, 04 Jun 2019 20:42:59 GMT

Advice: it doesn't work that way; you can't do that.

You must file a Form 8606 when your traditional IRA with basis is converted in whole or in part to a Roth. The form is used to calculate the taxable amount of the conversion.

I thought I may do the workaround by answering No for tra...

xlian001 — Tue, 04 Jun 2019 20:43:01 GMT

I thought I may do the workaround by answering No for tracking the nondeductible. But worry the inconsistent answer for the following year. Thanks for your advice.

If you presently have basis in nondeductible traditional...

dmertz — Tue, 04 Jun 2019 20:43:02 GMT

If you presently have basis in nondeductible traditional IRA contribution, you must answer Yes. You do not get to choose when or when not to apply your basis to traditional IRA distributions, including Roth conversions. If you have basis, your tax return must include Form 8606 whenever you make a distribution.

Thanks! Just finished the 8606 form.

xlian001 — Tue, 04 Jun 2019 20:43:03 GMT

Thanks! Just finished the 8606 form.

I wish that TTax would retain the records for the Cost Ba...

PS56k — Tue, 04 Jun 2019 20:43:05 GMT

I wish that TTax would retain the records for the Cost Basis - if you skip a year and then pick it up again, the previous data is NOT retained, and the new form implies you have NO HISTORY of contributions.