What is Form 8606: Nondeductible IRAs used for?
Form 8606: Nondeductible IRAs is used to report nondeductible contributions to traditional IRAs, distributions from Roth IRAs (and other IRAs in certain cases), and conversions to Roth IRAs.
TurboTax will generate Form 8606 if any of these situations apply to you:
- You made nondeductible contributions to a traditional IRA for 2015, including a repayment of a qualified reservist distribution.
- You received distributions from a traditional, SEP, or SIMPLE IRA in 2015 and your basis in traditional IRAs is more than zero.
- For this purpose, a distribution does not include a rollover, qualified charitable distributions, one-time distribution to fund an HSA, conversion, recharacterization, or return of certain contributions.
- You converted part a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2015.
- You received a nonqualified distribution from a Roth IRA in 2015 other than a rollover, recharacterization, or return of certain contributions.
TurboTax generates only one Form 8606 for taxpayer and one for spouse. It does not handle a separate Form 8606 when dealing with inherited IRA and Roth IRA distributions.
It doesn't generate a Form 8606 if you received a distribution from:
- An inherited Roth IRA that was not a qualified distribution or
- An inherited traditional IRA that has basis or
- You rolled over an inherited plan account to a Roth IRA
If one of these three situations applies, you will have to fill out a Form 8606 and mail it to the IRS with your tax return.