Filing form 8606 after submission

Forum|Forum|3 years ago
February 26, 2023
13 replies
88 views

Hi. I recently helped my daughter & son-in-law on their 2022 taxes and they filed 2 days ago. We've since realized that they made a $6,000 contribution to a non-deductible IRA -- this information was not entered into TT thus form 8606 was not generated. What makes this somewhat different than other questions that I've read on this subject is that the $6,000 contributed was immediately moved to a Roth IRA so taxes were paid when the conversion was done and the traditional IRA has a balance of $0. Since they will not need to worry about the taxable basis of the traditional IRA years from now, do they need to be concerned that form 8606 wasn't filed? If they do need to submit this, is it best to file the form separately and is there any way to avoid the $50 penalty that I've seen referenced.

Thanks,

Brian

Best answer by DanaB27

Your daughter would need to file Form 8606 to show the conversion (assuming the contribution was made in 2022 for 2022 and the conversion happened in 2022). Also, you need Form 8606 to calculate the nontaxable part of the conversion since they made nondeductible traditional IRA contributions.

It seems it might be best to file an amendment. But please wait until your refund or payment is processed. Please be aware that you can e-file your 2022 amended federal tax return, but states may require amendments to be printed and filed by mail. Please see How to amend a tax return for instructions.

Please review the steps below for making nondeductible traditional IRA contributions and the conversion.

To enter the nondeductible contribution to the traditional IRA:

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

To enter the 1099-R conversion:

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
On the "Review your 1099-R info" screen click "Continue"
Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

D

DanaB27

Answer

Employee Tax Expert

Your daughter would need to file Form 8606 to show the conversion (assuming the contribution was made in 2022 for 2022 and the conversion happened in 2022). Also, you need Form 8606 to calculate the nontaxable part of the conversion since they made nondeductible traditional IRA contributions.

It seems it might be best to file an amendment. But please wait until your refund or payment is processed. Please be aware that you can e-file your 2022 amended federal tax return, but states may require amendments to be printed and filed by mail. Please see How to amend a tax return for instructions.

Please review the steps below for making nondeductible traditional IRA contributions and the conversion.

To enter the nondeductible contribution to the traditional IRA:

Login to your TurboTax Account
Click on "Search" on the top right and type “IRA contributions”
Click on “Jump to IRA contributions"
Select “traditional IRA”
Answer “No” to “Is This a Repayment of a Retirement Distribution?”
Enter the amount you contributed
Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contribution before this tax year.
Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).

To enter the 1099-R conversion:

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
On the "Review your 1099-R info" screen click "Continue"
Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

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B

brian-perriginoAuthor

Level 4

Thank you @DanaB27 . I just stepped through a copy (using TT Premiere) and think I have it. I didn't totally understand the "recharacterized" but I answered "No" as advised. When I was done, form 8606 was generated and the tax liability did not change. I had already entered the 1099R data so think that is set. Now I'll just wait a few weeks until the originals are processed and file the amended. Looks like the Fed needs to be physically mailed ...all 56 pages!!!!.

Thanks again.

Brian