WIll TurboTax automatically generate a form 8606 if I have to file that form with my tax return?

[JohnW15]

TurboTax will usually, but not always, generate Form 8606.

Please see the TurboTax FAQ "Where do I find Form 8606?" below for full detail.

https://ttlc.intuit.com/replies/3300280

[dmertz]

Except for distributions from inherited IRAs, if Form 8606 is required and you've made all of the correct entries, yes, TurboTax will automatically generate Form 8606 and include it in your tax return.

[GLynch]

Turbotax was supposed to generate form 8606 to document my Non-Deductible IRA Contribution but I don't see the form in the final documents Turbotax generated online. The amount of the contribution appears on the 1040-SR and Schedule-1 where it should be and the calculated refund reflects the deduction...but I don't know if the IRS will get the form 8606 from Turbotax.  I spent an hour on the phone with 2 different tax reps and never got an answer as to whether I should just send a form by mail. I guess I will do that.

[dmertz]

If it's present on 2020 Schedule 1 line 19, your entries into TurboTax have told TurboTax that it's permitted to be a deductible contribution and that you want it to be a deductible contribution, not a nondeductible contribution.  If you've chosen to treat it as deductible, the contribution doesn't get reported on on Form 8606.

If you want the contribution to be nondeductible and appear on Form 8606 instead of Schedule 1 line 19, revisit the Traditional and Roth IRA Contributions section and change the answer that you previously provided when asked if you want to keep the contribution as a deductible contribution.

[GLynch]

I opened a Traditional IRA Savings account with $7k of after-tax money to reduce my 2020 taxable income by that amount. All IRA contributions must be reported. That $7k gets reported on line 2 of form 8606 as Basis in the IRA and is a Deductible contribution in the year it was made. Line 1 for non-deductible contributions is "0". The headline of the form says "Non-Deductible IRAs" but that is misleading because my Deductible contribution gets reported on the form too. There is no other form to report it. Since TurboTax didn't generate the form because the the contribution was treated as a deduction I will send the form 8606 (with $7k deductible contribution on line 2) myself.

[dmertz]

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That $7k gets reported on line 2 of form 8606 as Basis in the IRA and is a Deductible contribution in the year it was made.

GLynch, that's incorrect.  A deductible contribution does not get reported on Form 8606 (except for the effect that contribution has on the year-end value in traditional IRAs, reported on line 6).  Line 2 is to be the amount from line 14 of your previously filed Form 8606 unless there are adjustments.  TurboTax will put the contribution amount on line 1 of Form 8606 if the contribution is not deductible.

Unless you enter an amount directly, the amount on line 2 of Form 8606 comes from line 1 of the IRA Information Worksheet which is generally carried over form line 3 of your previous year's IRA Information Worksheet in TurboTax.

Perhaps you mistakenly included your current-year contribution when 2020 TurboTax asked for your basis in nondeductible traditional IRA contributions made for years prior to 2020.

[GLynch]

There were no IRA contributions prior to 2020.  And that first time, after-tax contribution had to be reported somewhere.  My age and AGI allowed me to contribute a maximum of $7k. Cumulative after-tax IRA funds go on line 2 of the Form 8606.  Because I had no previous 8606 history to carry over to line 2 the $7k is my accumulated basis on line 2.  Line 1 is "0" because there was no non-deductible portion of contribution.  And if there was no non-deductible contribution...doesn't that make the $7k on line 2 a deductible contribution reported on a Form 8606?  If not, where are deductible IRA contributions reported?  

Google "how to avoid being double taxed on  your after-tax IRA contributions" for links to how and why after-tax IRA contributions should be reported on Form 8606.

[AmyC]

The 8606 is only generated when you have non-deductible contributions. This means something went wrong. Income, data entry, or other oddity of nature, created a taxable IRA.

For data entry, see Where do I enter my Traditional or Roth IRA?

For income, if neither of you had a retirement plan available, there is no phaseout. Click the blue phaseouts that limit the IRA deduction. 

Deductible contributions to a traditional IRA will show up on your  sch 2 as an adjustment to income on line 19 titled IRA deduction.

Saver's Credit
Individuals may be able to take a tax credit of up to $1,000 if they make eligible contributions to an IRA.

@GLynch

[Chris91987]

But does the basic (free) version of TurboTax actually generate form 8606? I think I did everything right according to these guidelines link and indeed I see nothing on Schedule 1 line 20, while my Roth IRA amount is properly shown in 1040 line 4. I still do not see any form 8606 attached on the Tools/"Preview my 1040".

Just before submission, the system indicates I should upgrade to Deluxe version for another form needed, but no mention on 8606. An operator had indicated that Form 8606 is only available on the Premier version, but  I saw no such comment on the forums.

What is the case? 

Thanks!

[dmertz]

All version except the online Free version generate Form 8606 when required.  Form 8606 is not required and is not generated for a Roth IRA distribution if it is a qualified distribution (Age 59½ or over and for 2021 you had a Roth IRA before 2017), so the Free version should be sufficient for filing a qualified Roth IRA distribution.

[Chris91987]

Thanks for the quick reply dmertz! Correcting for the chat: I meant "the converted Roth" following the conversion process from the initial non-deductible contribution in my Traditional IRA to my Roth IRA. And then following the TurboTax process for filing this, as described in the link (previous message).

Makes sense. I will be upgrading to another version. Thanks!