Form 8606 and Form 1040 Row 4. What "populates" where?

[BTRR]

In years past, TT H&B populated form 1040 row 4 based on imported 1099-Rs.  However, TT never prompted me to include Form 8606.

1. Why didn't TT prompt me?

2. If I complete Form 8606, will it "populate" form 1040 row 4?

Please advise.  Many thanks.

[baldietax]

Form 8606 is used to track non-deductible contributions / basis in your Traditional IRA.  It's also required if you perform a Roth conversion (even if you don't have a basis).  See "Who Must File" in Form 8606 instructions

https://www.irs.gov/pub/irs-pdf/i8606.pdf

If you have a basis in your IRA and have any type of distribution reported on 1099-R, Form 8606 will calculate how much of the distribution is taxable and puts that amount on Form 1040 Line 4b.

Turbotax will include it in your return based on your 1099-R or IRA contribution inputs.  Please provide more details on your situation or concern if the above doesn't help.

[BTRR]

The last time I made a after-tax contribution to my Traditional IRA was 2004.  This was when the last 8606 (for contributions) was filed.
The first time I ever took a retirement distribution was 2023.  I didn't remember, nor did TT prompt me, to file Form 8606 (for the distribution).

Any advice?  Many thanks!

[baldietax]

Not a CPA, but my understanding is - if you don't have activity requiring File 8606 then it is not filed.  But you need to carry forward the basis which Turbotax will do on worksheets, but over the course of 19 years if you didn't use Turbotax consistently or some other issue occurred along the way, maybe the basis was lost and then Turbotax wouldn't have known to trigger 8606 for the distribution; when you input the 1099-R you would have had a question whether you made non-deductible contributions for prior years and confirm the basis carry forward to use.

It sounds like you may have to amend your 2023 return to get the right tax calculation on that distribution and adjustment to your basis which would carry forward to 2024 (which may or may not need amending also if you had any activity affecting Form 8606), and 2025.

@dmertz 

[dmertz]

Because you had basis in nondeductible traditional IRA contributions, a traditional IRA distribution in 2023 should have resulted in your 2023 tax return including Form 8606 to reduce the taxable amount of that distribution.  This is likely the result of not properly confirming in 2023 TurboTax your basis from line 14 of your 2004 Form 8606, as baldietax suggests.

I agree with baldietax that it seems that you need to amend your 2023 tax return to add Form 8606.  If no traditional IRA distributions occurred in 2024, the amount on line 14 of your 2023 Form 8606 carries forward to line 2 of your 2025 Form 8606.  If you did take a traditional IRA distribution in 2024, you'll need to amend that too, with line 14 of your 2023 Form 8606 carrying forward to line 2 of your 2024 Form 8606 and line 14 of your 2024 Form 8606 carrying forward to line 2 of your 2025 Form 8606.

[BTRR]

Excellent!  Thank you!

1. To amend my 2023 return, which version of TT do I use: TT 2025, or TT 2023, which one?

2. Once I'm in using the correct version of TT, how do I get TT to queue-up the Q&A for Form 8606?

Please advise.  Many thanks!

[CatinaT1]

If you want to make changes or add a document to a tax return that has already been filed and accepted by the taxing agency, you should follow these guidelines. 

• You must first wait until the initial return is completely processed. 
• You will have to use the same TurboTax account that you used for the original tax return. 
• Once you begin your amendment, you'll see your original return.  
• The refund calculator will start new at $0 and only reflect the changes in the refund or tax due 
• Only make changes to the areas of your return that need to be corrected. 
• You have three years from the date you filed your return or two years after you paid the tax due (whichever is later) to file an amendment 

Select your product below and follow the instructions. 

Amend TurboTax Online 

Amend TurboTax CD/Download 

[baldietax]

@BTRR to amend 2023 you need to use the 2023 s/w.  See instructions posted by @CatinaT1 with note you need to save the amended return as a new .tax2023 file do not overwrite the original return - you can either make a copy of the .tax2023 file before you start, or use "Duplicate" in the File menu to save the amended return as a new copy.  Also ensure you have PDF with all forms and worksheets for both your original and amended returns, for your records.

For Form 8606 if you had a 1099-R it is triggered in the questions there not sure about 2023 workflow but you may need to click Done or Continue from the 1099-R summary page after inputting the 1099-R and it will then ask you whether you had a basis to track and you can update it there.  Alternatively you can also go to Deductions & Credits / Retirements and Investments / Traditional and Roth IRA Contributions and check the Trad IRA box and then answer the questions accordingly (mainly "No" if you didn't make a contribution) and you will get the same question about prior basis to update.

You may also need to provide the market value of all your Traditional IRAs as of 12/31/23 if you didn't already for the pro-rata calculation on 8606.

When done check the calcs and outcome on Form 8606 in Forms mode, you should see the carryover basis on Line 2.  Based on what you described I think when you update the basis you should get a tax refund as it will recalculate some of the distribution was non-taxable.  Form 8606 Line 14 should then have the updated basis to carry forward to 2024/5.  Then go through the same process for 2025 to update the basis as Turbotax 2025 won't know about it from your 2024 transfer.

You will have to paper file the 2023 amendment but I don't think you need to wait on that to file 2025, as long as you have the correct basis carryover for 2025 return so you don't need to amend it later.