Form 8906

[HOB2]

The instructions for 8906 say complete if you have the following:  "You converted part , but no all, of your traditional IRAs to Roth IRAs in 2025 AND you made nondeductible contributions to a traditional IRA in 2025 or a year earlier."  I did a Roth Conversion, but I did not make a nondeductible to a traditional IRA in 2025 or a year earlier.  Since "AND" is included in these instructions, it would seem the trigger for this form is both items.   Since I only had one of these items - not both, it appears Turbo Tax is incorrect in generating Form 8906 for me.  Is this an error in Turbo Tax?

[CatinaT1]

You will still need form 8906 even if you only had a Roth conversion. The IRS uses this form to track "basis"—the money you've already paid taxes on—to ensure you aren't taxed twice on the same dollars.

You must attach this form to your 1040 for the 2025 tax year if you did any of the following:

• Converted any amount from a Traditional, SEP, or SIMPLE IRA to a Roth IRA.
• Made nondeductible contributions to a Traditional IRA.
• Took a distribution from a Roth IRA (unless it was a 100% qualified distribution).
• Took a distribution from a Traditional IRA and you have basis from previous years.

Failing to file Form 8606 can result in a $50 penalty per year, but the real cost is usually the accidental tax bill the IRS generates because they don't know you've already paid taxes on that money.

[HOB2]

I understand what you are saying and I think I see the source of confusion.  The lead in sentence in the instructions on form 8606 says "Complete this part only if one of more of the following apply:"  Beneath that are three bullet points.  The bullet point that applies to me, and the one I quoted in my original question clearly states AND meaning for that bullet point to apply, both conditions should be met.  Its easy enough to go ahead and file 8606, but can you see how the instructions imply that it is not needed?

[baldietax · Accepted solution]

Those are the instructions for Part I.  If you only have a Roth conversion it fills out Part II.

If the concern is the question about MV of your IRAs that should not be needed, others have complained about this being asked - I think you can just put a $1 if it is not used on the form and doesn’t affect your taxes.

[HOB2]

Thank you!   My concern is indeed the question about the entering the value of the IRAs.  It would be very helpful to users if this question was reworded or eliminated for those who only need to fill out Part II.   How can we get Turbo Tax to address this complaint?

[RogerD1]

No, this is not an error - this form does need to be reported on your return. The lead-in instructions that you are seeing only apply to part I of Form 8606.  If you made a Roth conversion, the taxable part of that conversion gets calculated in part II of Form 8606.  If there weren't any non-deductible contributions in the traditional IRA from which you made the conversion, then the amount will be fully taxable and reported on line 18 in Part II of Form 8606.  That amount will then flow your Form 1040 line 4b to be taxed on your current year return.

[baldietax]

@RogerD1 @CatinaT1 but why does Turbotax ask for the MV of IRAs for the case of someone with only a Roth conversion to report but without nondeductible contributions or basis in the IRA, which only requires Part II?

[HOB2]

Yes, I would very much like to know the answer to this as well!

[dmertz]

With regard to Roth conversions, Form 8606 Part II is required to be completed for all conversions from a traditional IRA to a Roth IRA.  Part I (which this question is about) is required to be completed only if the taxable amount of the Roth conversion cannot be determined on Part II alone because you have basis in nondeductible traditional IRA contributions and you still had funds in a traditional IRA at year-end.