How to calculate IRA basis for all prior year contributions?

Forum|Forum|2 years ago
March 10, 2024
1 reply
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Hello,

If I contributed the below non deductible amounts to Tradition IRA, the total contributions come to $41,500. Should my basis while submitting the 2023 taxes be 41,500? (as additional information, I moved each contribution to Roth in the respective year)

2017 - 5,500 (did not report 8606)

2018 - 5,500 (did not report 8606)

2019 - 6,000 (did not report 8606)

2020 - 6,000 (reported 8606 but instead of setting basis to 23,000, I set it to 6,000)

2021 - 6,000(reported 8606 but again set the basis to 6,000 wiping all previous non-deductible contributions)

2022 - 6,000 (same as 2021)

2023 - 6,500 Finally, chance to correct the basis. Should this be 41,500?

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Best answer by DanaB27

No, if you converted the funds in the same year the contribution was for then you basis on line 14 of Form 8606 should be $0 (assuming all your all traditional, SEP, and SIMPLE IRAs were $0 at the end of each year). On line 1 of Form 8606 will be the current year nondeductible contribution.

If you made nondeductible traditional IRA contributions and conversions then you are required to file Form 8606. You can file the missing Form 8606 by itself. Please download the prior Form 8606 here (search for the year).

Technically you can be fined $50 for failing to file the form on time, but the penalty can be waived if you have reasonable cause. Please see Relief for Reasonable Cause for additional information.

DanaB27Answer

Technically you can be fined $50 for failing to file the form on time, but the penalty can be waived if you have reasonable cause. Please see Relief for Reasonable Cause for additional information.

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