input 12/31/2019 value of ira's

[nicholetuck]

I had no IRAs opened until a few months ago, and couldn't put much in a roth IRA due to income. I will be making a contribution for 2019 of $3030 to a nondeductible IRA before July 15, 2020. In the traditional IRA section, it says "Let us know if you made and kept track of any nondeductible contributions to your traditional IRA from 2018 or prior years." ... nothing about 2019.

If I do select yes to that question, the next page says "If you did make any nondeductible contributions, look at your most recent Form 8606. Find the box called total basis and enter the number from that box below. If you never filed a Form 8606, just enter 0 (zero)", but the box to fill in after that statement still says "Total Basis as of December 31, 2018".... which doesn't include my 2019 contributions. 

Do I just not notate it as a nondeductible contribution or what do I do here? I appreciate any help!

[VolvoGirl]

Why would you answer yes?  You didn't even have a IRA in 2018 or prior.  Answer NO.

[nicholetuck]

It is a contribution for 2019 though, and if I don't put anything about it being a nondeductible contribution how will they know? Is there a separate area for me to fill out form 8606 for 2019?

[VolvoGirl]

I never made a non deductible ira contribution so I don't know the questions for it.  I'll page @dmertz 

[macuser_22]

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@nicholetuck wrote:

It is a contribution for 2019 though, and if I don't put anything about it being a nondeductible contribution how will they know? Is there a separate area for me to fill out form 8606 for 2019?

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Yes.  The IRA contribution  interview.  Say you want it to be non-deductible if the question comes up.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

[nicholetuck]

@macuser_22The details under the "Any Nondeductible Contributions to Your IRA?" question say:

Let us know if you made and kept track of any nondeductible contributions to your traditional IRA from 2018 or prior years. (This is not common.) Most people do not make or track any nondeductible contributions to their IRAs.

So even though the contribution was for 2019, and the question is asking about 2018, would I still select yes?

[Critter]

@nicholetuck 

Check your other posts for the answer you seek.

[dedugan]

My suggestion is do not put non-deductible money into an ira.

You get no benefit versus putting the money into a regular savings or investment account.  And it's a pain in the ass to deal with when you start making RMD's.

[dmertz]

"You get no benefit versus putting the money into a regular savings or investment account."  That might be true for some individuals, but for many others there are several potential benefits, depending on the individual's particular circumstances.  For some, the deferral of investment gains will allow those gains to be taxed at a future, lower marginal tax rate.  For some, it can be a path to getting money into a Roth IRA to grow tax free for those not eligible to contribute directly to a Roth IRA.

[PapaBruce]

I sure wish I had never made a nondeductible IRA contribution!

I also wish TurboTax would ask me ALL pertinent questions about it every year! (Form 8606)

[spd66]

dmertz stated: "To complete the calculations on Form 8606, TurboTax has to assume something for the missing amount needed on line 6."

When the RMD amounts (gross and taxable) and taxes paid on the RMD's have been entered into TT, why not assume the tax due is based on the taxable amount at that point and not wait to determine tax on the RMD until later. That would initially show the higher amount of taxes due or lower amount of refund. Then when TT asks for the total basis amount of the IRA and market value at end of reporting tax year, the adjustment made would not be a shock to the taxpayer. For example, my total basis is less the a few percent of the market value. Using the example of the OP where tax due increased by $1000, calculating taxes on RMDs reported would show amount due would be $1030 if total basis is 3% of the market value. The taxes due would then drop to $1000 when the basis and market value have been entered. End result the same but less shock to the TT using taxpayer.