topic Re: Not calculating form 8606 correctly? in Retirement tax questions

Does not calculating form 8606 uses basis as answer?

moorewp6 — Tue, 25 Feb 2020 23:01:21 GMT

does not fill out or generate the form, it asks for basis and uses that as the not taxable ammout

Re: Does not calculating form 8606 uses basis as answer?

DawnC — Tue, 25 Feb 2020 23:37:20 GMT

We'll automatically generate and fill out Form 8606 (Nondeductible IRAs) if you reported any of these on your tax return:

Nondeductible contributions made to a traditional IRA
Distributions from a traditional, SEP or SIMPLE IRA that had nondeductible contributions (excluding rollovers, conversions, recharacterizations, qualified charitable distributions, one-time distribution to fund an HSA, or return of certain contributions)
Conversions from a traditional, SEP, or SIMPLE IRA to a Roth IRA
Distributions from a Roth IRA (other than rollovers, recharacterizations, or a return of certain contributions)

However, if any of these 3 situations apply to you:

You received a distribution from an inherited traditional IRA that had nondeductible contributions
You transferred an inherited plan account to a Roth IRA
You received a distribution from an inherited Roth IRA that was not a qualified distribution

then you'll have to download and print Form 8606, manually fill it out (instructions), and print and file your return, as you won't be able to e-file.

To trigger the 8606 in TurboTax for the 4 situations listed at the top of this article, use these instructions:

Open your return if it isn't already open.
Inside TurboTax, search for this exact phrase, including the comma: 8606, nondeductible ira contributions
Select the Jump to link in the search results.
Proceed through the IRA section, answering questions as you go.
When you reach the screen Any nondeductible contributions to [taxpayer's] IRA? answer Yes, then continue. We'll generate and fill out the 8606 behind the scenes.

Tip: On joint returns, 8606-T stands for "taxpayer" (first person listed on the return) and 8606-S denotes "spouse."

Related Information:

Re: Not calculating form 8606 correctly?

LPW414 — Thu, 05 Mar 2020 22:03:21 GMT

Both my husband and I use the 8606 form because years ago we contributed to IRA's that were non-deductible. On our 2019 taxes for form 8606 His (taxpayer) 8606 worked fine. On mine I get the comment "Some values are too large and have caused calculation errors." My total of all IRA's is greater than 2 million dollars my husbands in about $500k. My numbers are all correct but I continue to get this error and can not e-file my tax returns. What do I do?? Thanks for any help you can offer. I can't determine how to contact anyone at Turbo tax. I bought the premium version.

Re: Not calculating form 8606 correctly?

LPW414 — Thu, 05 Mar 2020 22:07:33 GMT

Premier Version (not Premium)

Re: Not calculating form 8606 correctly?

fanfare — Fri, 06 Mar 2020 03:33:33 GMT

you may want to switch to the CD/Download version.

Note: i don't have 2019 TurboTax, but I can confirm, as you noted, your numbers are not a problem for 2018 TurboTax CD/Download.

Is your prior years basis tiny (I mean really tiny !) ?

TurboTax CD/Download will compute the basis adjustment factor to five decimal places.

Even a basis of $750 is calculated with no error.

At that scale the prorated amounts are negligible, and 8606 could be done away with.

Re: Not calculating form 8606 correctly?

LPW414 — Fri, 06 Mar 2020 04:48:17 GMT

The cost basis of non-deductible IRA's from the past that I haven't used is about $38,000. My husband has a similar amount and his 8606 calculated corrected without error. I don't know if the fact my total IRA is over a million dollars (my husbands isn't) if that somehow is the glitch. I initially tried to use Turbo Tax online thinking it was free and when I learned because I sold some stock I would need to pay for an upgrade, I went ahead and bought the 2019 Turbo tax CD from Best Buy. I've since seen that others have had the same issue and message from their 8606 form. Since I can't e-file unless this bug is corrected by Turbo Tax, I'm at a loss what to do other than print everything out and many manually write out my 8606 (the numbers are on my computer) and just mail it all in. Have you seen in the past that during an update Turbo Tax fixes bugs? or do you recommend I print and mail my return? Unfortunately I have given my credit card info to Turbo Tax for my state e-file but maybe that will be refundable. What do you think? Thanks!

Re: Not calculating form 8606 correctly?

macuser_22 — Fri, 06 Mar 2020 05:10:09 GMT

That should not create any problems. I suggest deleting the 1099-R and re-enter.

If the same error - is it in error check that you get the error?

In the forms mode look at the "IRA Info Worksheet".

Make sure that your 2018 carry forward basis on line 12 and 1 is correct.

Make sure that the 2019 year end value on line 18 is correct.

Exactly what does the error say?

Re: Not calculating form 8606 correctly?

fanfare — Fri, 06 Mar 2020 14:18:33 GMT

if you get a refund there is no penalty for filing late.

Otherwise, go to www.irs.gov/payments and pay your tax due under "EXTENSION".

Approval is automatic.

That gives you till October for the bug to be fixed.

Re: Not calculating form 8606 correctly? Update March 6,2020: Turbo Tax fixed the bug!

LPW414 — Fri, 06 Mar 2020 20:07:08 GMT

Thanks for your thoughts and info. I wanted to let you know that when I went into Turbo Tax Premier today there were several minutes of updates. After I downloaded the updates I was able to e file my fed and state tax returns without seeing the former error "Some Values are too large and have caused calculation errors." from form 8606-S. This is the first time in 15+ years of using this software that there was a bug that prevented me from filing my taxes. Other times the errors were mine!!

Re: Not calculating form 8606 correctly? Update March 6,2020: Turbo Tax fixed the bug!

DavidD66 — Sat, 07 Mar 2020 02:18:00 GMT

Thanks for sharing your experience.