8606

[BBFL]

I need assistance on correctly completing my IRA worksheets (form 8606, etc…). My wife and I each make nondeductible contributions to a Traditional IRA every year and then convert the funds to our Roth IRAs. We have done this for several years now and it is usually a simple process. However, we made our 2019 Traditional IRA contribution ($6,000 each) on 2/27/20 which is the same day we made our 2020 Traditional IRA contribution ($6,000 each). We then converted the $12,000 each to our Roth IRAs on 3/2/20.

Using the Turbotax software, I am not quite sure the information is being input correctly to reflect that the tax free conversion for both 2019 and 2020 was done in calendar year 2020. It is currently showing as an excess contribution for 2021 which is not correct. Can you assist me in making sure the software correctly reflects the 2019 and 2020 conversion to the Roth completed in calendar year 2020 is reflected properly?

[macuser_22]

---

@BBFL wrote:

I need assistance on correctly completing my IRA worksheets (form 8606, etc…). My wife and I each make nondeductible contributions to a Traditional IRA every year and then convert the funds to our Roth IRAs. We have done this for several years now and it is usually a simple process. However, we made our 2019 Traditional IRA contribution ($6,000 each) on 2/27/20 which is the same day we made our 2020 Traditional IRA contribution ($6,000 each). We then converted the $12,000 each to our Roth IRAs on 3/2/20.

Using the Turbotax software, I am not quite sure the information is being input correctly to reflect that the tax free conversion for both 2019 and 2020 was done in calendar year 2020. It is currently showing as an excess contribution for 2021 which is not correct. Can you assist me in making sure the software correctly reflects the 2019 and 2020 conversion to the Roth completed in calendar year 2020 is reflected properly?

---

Did you enter the 2020 contribution into the 2020 IRA contribution interview and say that is was non-deductible.

And did you enter the 2019 contribution made in 2020 *for* 2019 into the 2019 IRA contribution interview as non-deductible that would have produce a 2019  8608-T and 8606-S for each of you with the 2019 contribution on  line 1,3 and 14?   You need the 2019 8606 line 14 for the 2020 1099-R conversion to apply the 2019 "basis".

[BBFL]

I did enter the 2020 contribution into the 2020 IRA contribution interview and say that is was non-deductible.

I did not enter the 2019 contribution made in 2020 *for* 2019 into the 2019 IRA contribution interview as non-deductible. I did not use Turbotax for 2019 taxes and form 8606 was not completed. The 1099-R from Vanguard wasnt available for tax year 2019 since the since the contribution and conversion wasn't executed until 2020. Do I need to amend my 2019 taxes? Hoe do I get this to reflect properly on Turbotax premier 2020?

Thanks for your help

[macuser_22]

---

@BBFL wrote:

I did enter the 2020 contribution into the 2020 IRA contribution interview and say that is was non-deductible.

I did not enter the 2019 contribution made in 2020 *for* 2019 into the 2019 IRA contribution interview as non-deductible. I did not use Turbotax for 2019 taxes and form 8606 was not completed. The 1099-R from Vanguard wasnt available for tax year 2019 since the since the contribution and conversion wasn't executed until 2020. Do I need to amend my 2019 taxes? Hoe do I get this to reflect properly on Turbotax premier 2020?

Thanks for your help

---

Yes,  Unless you filed a 2019 8606 to report the non-deductible 2019 contribution it can be disallowed by the IRS and you are not allowed to use it to offset the tax on the Roth conversion - it would be treated as if it was deductible even though you did not receive the deduction - that is the penalty for failing to file the required 8606.  You can amend 2019 and file it late.

[BBFL]

Thank you. Could I submit the 2019 form 8606 on its own or do I include it with an amended 1040-X?

[DaveF1006]

According to the IRS instructions, If you aren't required to file an income tax return but are required to file Form 8606, sign Form 8606 and send it to the IRS at the same time and place you would otherwise file Form 1040, 1040-SR, or 1040-NR. Be sure to include your address on page 1 of the form and your signature and the date on page 2 of the form.

Since you already filed the return but did not include the 8606, you can send it in as a stand alone document. If you sent a 8606 in but if it is incorrect, I would advise filing an amended return that includes the corrected 8606 just to be safe.