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Amending IRAs for both Traditional IRA and Rollover IRA

Forum|Forum|5 years ago
May 28, 2021
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Due to my ignorance about IRAs and Form 8606 I didn't file Form 8606 at all for 2017, 18, and 19 when I contributed to nondeductible traditional IRA. So, I'm filing form 8606 for 2017, 18, and 19 to amend. I understand that I have to pay penalty which is ok. However, the situation is a bit more complicated because in 2018 I rolled over my 401k(s) to Rollover IRA.

2017

I only contributed nondeductible IRA for $5,500. So, I think this is simple I just have to do

Line 1 = 5500

Line 2 = 0

Line 3 = 5500

Line 14 = 5500

2018

This year I'm not sure what to do with Line 2 and Line 6. This year I contributed only $4,575 but as I mentioned above this year I rolled over my 401k (From two employers) to a Rollover IRA for a total of $17,339.56 (I took the number from form 5498 Box 2). Given what I know so far this is what I think I should do but I could be completely wrong.

Line 1 = 4575

Line 2 = I'm not sure what to put here. I thought it would just be 5500 which is from 2017?

Line 3 = 10075. Now the instruction here is saying that I should move on to Line 14 if I didn't take a distribution from traditional, SEP, or SIMPLE IRAs, or make a Roth IRA Conversion. The instruction also says that I shouldn't complete the rest of Part I?

Line 6 = 17339.56. Do I need to enter my rollover number here?

What else do I need to do for 2018.

2019

I think this year depends on 2018. But I only did $1,450 for nondeductible contribution. So I think Line 1 would just be 1450 but what should I do with Line 2 and the rest?

TurboTax Deluxe Online

Best answer by macuser_22

Line 2 = 5500.

A 401(k) rollover does not get entered on 8606 at all unless you had a non-deducible basis in the 401(k). That is usually reported with a separate 1099-R for the 401(k) rollover but could all be on one 1099-R and would be in box 5. Then you could add that amount to line 1 on the 8606 for the year of the 401(k) rollover.

macuser_22Answer

Employee

Line 2 = 5500.

A 401(k) rollover does not get entered on 8606 at all unless you had a non-deducible basis in the 401(k). That is usually reported with a separate 1099-R for the 401(k) rollover but could all be on one 1099-R and would be in box 5. Then you could add that amount to line 1 on the 8606 for the year of the 401(k) rollover.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

4

4440864Author

Thanks for the reply. Then I think my 8606 will be simple to just add up all of the contributions I made from 2018, 18, and 19? Since I haven't done and Roth Conversion yet.

Now that you mentioned about 1099-R. In 2020, I started doing 401K In-plan Roth Conversion which as you said I see that in Box 5 I have the after-tax money I contributed. Do I need to report 8606 for 2020 as well? This is still in my 401k plan.

macuser_22

Employee

@4440864 wrote:

Thanks for the reply. Then I think my 8606 will be simple to just add up all of the contributions I made from 2018, 18, and 19? Since I haven't done and Roth Conversion yet.

Now that you mentioned about 1099-R. In 2020, I started doing 401K In-plan Roth Conversion which as you said I see that in Box 5 I have the after-tax money I contributed. Do I need to report 8606 for 2020 as well? This is still in my 401k plan.

No. The 8606 only applies to the basis that is in a Traditional IRA. Nothing in your 401(k) or Designated Roth goes on a 8606.

I assume that you already know, but I will point it out anyway, that the IRA basis applies to aggregate total of all Traditional, SEP and SIMPLE IRA accounts that you might have so when you take a distribution from any of those, the non-taxable basis must be pro-rated between the distribution and total aggregate IRA value.

Therefor, if your 401(k) rollover IRA is a large amount then non-taxable amount of a small distribution will also be small and most will be taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**