Form 8606

[BBFL]

A year ago a family member made a nondeductable contribution directly to a Roth IRA as she was within the income limits to do so. She thought she needed to file a form 8606 to report the contribution. Was she mistaken to file the form 8606 and if so what does she need to do to correct/address it?

[ColeenD3]

Basically, you must file Form 8606 for every year you contribute after-tax amounts (non-deductible contributions) to your traditional IRA. Conversions from traditional, SEP, or SIMPLE IRAs must also be reported on Form 8606. Additionally, you must file the form every year you receive a distribution from your Roth IRA or your traditional IRA if you ever previously contributed after-tax amounts.

[Edited 3/24/2022|4:00am PST]

[BBFL]

Thanks for the feedback. I think the confusion we have is that in reading the form it seems to address contributions to a traditional IRA and conversions to a Roth IRA. We don't see a line item that addresses a direct contribution to a Roth. Am I misreading the form? Thanks for your help. 

[MaryK4]

If it was a contribution to a Roth IRA she did not need to file the 8606- so she may have to file and amended return and/or 8606.  I am not sure how she filed it (where she put the information) so I do not know what the correction should be (if you know what lines she put it on, add to this thread)

Generally, after you file your return, you can change a nondeductible contribution to a traditional IRA to a deductible contribution or vice versa if you make the change within the time limit for filing Form 1040-X, Amended U.S. Individual Income Tax Return.  You may also be able to make a recharacterization.  If necessary, complete a new Form 8606 showing the revised information and file it with Form 1040-X.About Form 8606, Nondeductible IRAs - Internal Revenue ...

@BBF

[BBFL]

That makes sense. The only place she recorded the nondeductible contribution directly to the Roth IRA was on form 8606. There is nothing noted on the 1040 so would it be correct to file only an amended 8606 with the entries zeroed out since this was a direct contribution to a Roth and attach an explanation as to the amended 8606? This wouldn't require a 1040X would it? Thank you

[GeorgeM777]

Yes, you can file an amended Form 1040-X.  It appears that the only item that requires new information is Part III where you can enter the reason why you are amending the return and you can also attach the amended Form 8606.  Perhaps leaving the Form 8606 blank or perhaps adding an explanation in Part III that the original Form 8606 was prepared in error and that it should be discarded might suffice to correct the issue.  Be sure to include in your explanation in Part III that the filing of the original Form 8606 in no way impacted the Form 1040 in that there was no IRA deduction taken, but it appears you already have this issue under control.  

@BBFL