No 8606 from 2019

[Brian 1]

I contributed the maximum possible $6k to my Traditional IRA in 2019.  My income was too high for this to be a deductible contribution, and my plan was to do a Roth conversion with this.  I ended up forgetting to do the conversion in 2019, but my understanding is that this shouldn't be a problem, as you can do the conversion any time afterwards (albeit with taxes on any gains made as part of the conversion).  I did the same thing again this year - contributed $6k and then this year I did actually do the Roth conversion of exactly $6k.

The Traditional IRA also has other funds from other conversions and/or rollovers in the past.  It was only after this process that I realized that the conversion amount ends up being split between your pre-tax and after tax amounts in the account; you don't get to specify which type of dollars are being converted over, so you end up with a blend, part of it being taxed if you have any pre-tax dollars in there.

When filing taxes this year, Turbotax showed *no* after-tax basis for my IRA, though it should have been $6k because of last year's non-deductible contribution.  When I looked at my forms submitted from last year, no 8606 was generated / submitted.

1) When Turbotax told me that my IRA contribution was not deductible in my 2019 return, that means that it is a "non-deductible contribution", which should be reported on 8606 so an after tax basis is established, right?  Why did Turbotax not then file an 8606 for me?

2) I spent 4+ hours trying to understand what was going on here because the missing basis caused more of this year's Roth conversion to be taxed than should have.  If this is indeed an erroneous omission of the 8606 on Turbotax's part from last year, how do I go about compensation for the error and my time, under the "Accurate / no errors guarantee"?

[DanaB27]

1) Yes, if you entered the traditional IRA contribution and it was nondeductible because of your income limit (or if you choose to make it nondeductible) then TurboTax should create Form 8606 for your 2019 tax return to report the basis.

To enter the nondeductible contribution to the traditional IRA:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution?”
6. Enter the amount you contributed
7. Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
8. Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had a nondeductible contributions before this tax year.
9. If you had a basis in the Traditional IRA before then enter the amount.
10. On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (in your case TurboTax will say that because of your income your contribution will be nondeductible and this triggers Form 8606).

2)Please see How do I submit a claim under the TurboTax 100% Accurate Calculation Guarantee or 100% Accurate, Exp...

[Brian 1]

Thank you!

I went through the "amend 2019" flow to see if I could simulate what you described below.

After step 8 below (the answer to that question is 'no), I don't get a screen asking me about whether or not to make part of my contribution non-deductible, I just get this.

Also, trying to fill out the form you directed me to says I'm unable to because the IRS has not contacted me about this (and they won't, since they don't know I'm missing an 8606 form from the previous year).  

[MarilynG1]

@Brian 1 You need to answer YES to 'any nondeductible contributions' to trigger Form 8606.

Click this link for more info on Form 8606. 

[Brian 1]

The instructions on the only page I've come across with that language are for the prior year.  It expressly calls out 2018.

If there is a screen that ask the question as you mention, I need exact instructions for how to get there, and can you provide a screen shot?

This is the text that displays when filling out the 2019 year return.

[DanaB27]

Correct, the question is for prior years (step 8). 

As mentioned above in my instructions, in your case you will not get the question in step 10. Instead TurboTax will say that because of your income your contribution will be nondeductible and this triggers Form 8606. With the current 2019 TurboTax Desktop version I could not recreate the error you are experiencing, Form 8606 was filled out and available after the "IRA deduction summary" screen showing $0.

You might need more detailed help: What is the TurboTax phone number?