Filing 8606 Line 8 - Tax Year vs. Calendar Year

[acp120]

Hi everyone, Here are some details on my situation:

2021 Tax Year

I contributed $6000 to my traditional IRA as a non-deductible contribution in March of 2022. I converted that to my Roth IRA in early April 2022 before the 2021 tax year ended. However, I forgot to file a 8606 for the 2021 tax year. I understand I will need to pay a $50 penalty.

2022 Tax Year

I contributed $6000 to my traditional IRA as a non-deductible contribution in early April 2023. I converted that to my Roth IRA in April 2022 before the 2021 tax year ended.

Here are some questions I had:

Question 1

When I file my 8606 for the 2021 tax year, do I put $6000 in line 8 or do I put it in line 8 of the 2022 8606 form? I think my question essentially boils down to if the prompt for line 8 means calendar year or tax year. 

Question 2

If I need to add the 2021 conversion to my 2022 8606 form, then how does the IRS know my true cost basis? Does the IRS "see" that I didn't convert my 2021 non-deductible contribution?

Question 3

I'm a little bit confused on Line 4 of the 8606 forms. I technically made my contributions before the tax year ended. So this tells me I should put 6000 for Line 4, but that would cause Line 5 to be 0, makes Line 10 = 0.00, and ultimately makes Line 17 = 0. The IRS instructions for form 8606 implies Line 4 is for anyone that made deductible traditional contributions, but Line 4 doesn't explicitly say that. Can someone let me know if I should put 0 for Line 4 in both my 2021 and 2022 8606 forms?

Hypothetical Question

If I made my non-deductible contribution in March of 2023 (for the 2022 tax year), but did the conversion in May of 2023 with no additional non-deductible contributions for the 2023 tax year, then how does the IRS know that I have a cost basis of $6000 for the 2023 tax year? I am assuming the value put in Line 14 will be the Line 2 value for the following year I fill out a 8606. Can someone confirm?

Please let me know if you need any clarifications.

[DanaB27]

Q1. You didn't make the conversion in 2021 therefore you will only have your basis of $6,000 on lines 1, 3, and 14 of your 2021 Form 8606. On your 2022 Form 8606 line 8 will be entered unless you have to use Worksheet 1-1. Figuring the Taxable Part of Your IRA Distribution. Please see Reporting your nontaxable distribution on Form 8606. TurboTax does this automatically. 

Q2. The IRS knows that you converted the contribution for 2021 in 2022 because of your Form 1099-R and Form 5498.

Q3. Please be aware, you only enter line 4 if you made a conversion in that year. And of course, you can't convert in 2022 funds that were contributed in 2023 for 2022. Therefore, the basis will be reduced by that amount to calculate the taxable portion of the 2022 conversion.

Yes, your basis on line 14 of your 2022 Form 8606 will carry over to line 2 of your 2023 Form 8606.

[acp120]

Thanks for the reply! I now understand what I need to fill out in my 8606 forms.