Incorrect total basis on form 8606 for a prior year

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Topic Author
bortery
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Incorrect total basis on form 8606 for a prior year

Post by bortery »

I contributed the maximum amounts to a traditional IRA for 2010, 2011, and 2012.

When filing my 2010 taxes, I correctly put the total basis on form 8606 as $0.
When filing my 2011 taxes, I mistakenly put the total basis on form 8606 as $0.

I have two questions:

1. What should I put as my total basis on form 8606 when filing my 2012 taxes? Turbotax automatically put the basis in as $5,000 (calculated from my 2011 taxes), and when I tried to change it to $10,000, it said I should add an exaplanatory note. Is this the correct way to proceed? Or should I keep the total basis as $5,000?

2. Do I need to amend my 2011 taxes to correct the cost basis? If so, what exactly needs to be done? Do I just send the IRS an 8606 form with the change, or do I need to send them my entire taxes for 2011 with the change?

Thanks!
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

It's not clear that you are understanding basis correctly. IRA basis comes from making non deductible contributions to a TIRA account.

Form 8606 is cumulative, so first we need to determine if you have a basis at the end of 2009. If your 2010 contribution was not deducted, you would add that 5,000 to your prior basis etc. If you did a conversion or took distributions in any of these years, some of your basis is used up in each distribution. You would not file an 8606 to show a 0 non deductible contribution unless you had to file one for another reason.

Therefore, more clarification is needed in order to determine what you should do on your 2012 return. Were all 3 of these contributions non deducted?
Topic Author
bortery
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Re: Incorrect total basis on form 8606 for a prior year

Post by bortery »

Alan S. wrote:It's not clear that you are understanding basis correctly. IRA basis comes from making non deductible contributions to a TIRA account.

Form 8606 is cumulative, so first we need to determine if you have a basis at the end of 2009. If your 2010 contribution was not deducted, you would add that 5,000 to your prior basis etc. If you did a conversion or took distributions in any of these years, some of your basis is used up in each distribution. You would not file an 8606 to show a 0 non deductible contribution unless you had to file one for another reason.

Therefore, more clarification is needed in order to determine what you should do on your 2012 return. Were all 3 of these contributions non deducted?
Sorry for the confusion, let me see if I can clarify.

I had never contributed to a traditional IRA until I contributed for 2010. I then did so for 2011 and 2012. Each of those contributions was non-deductible. I converted none of them (you helped me out in a prior post where I had converted but recharacterized, so in essence, there was no conversion). So from what I understand:

My 2010 taxes should have a total basis of $0.
My 2011 taxes should have a total basis of $5,000.
My 2012 taxes should have a total basis of $10,000.

However, I mistakenly put a total basis of $0 on my 2011 taxes, so TurboTax looked at that, saw I contributed $5,000 for 2012 and therefore said my total basis for 2012 should be $5,000.

Let me know if I can clarify anything further. Thankrs!
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

Sounds like your 2010 contribution was non deductible as well, so your basis on your 2010 Form 8606 would be the full amount of your contribution (5,000). Same for 2011 except your 2011 8606 starts with the 5,000 basis from 2010 on line 2 and the current year 5,000 on line 1. Total line 3 of 10,000. Then 10,000 on line 2 of your 2012 8606 plus 5,000 2012 contribution, total basis now 15,000.

On the other hand, if you deducted your 2010 contribution, then your figures are correct and your total basis is now 10,000. If that's the case, why did you file an 8606 for 2010?

If any of these 8606 forms are incorrect, you need to revise them starting with the oldest since the amounts are cumulative. For prior years, you can amend it on a stand alone basis if you return is not otherwise affected.

For your 2012 return, you can enter the correct prior basis (may require you override basis data carried over that is incorrect). Then around the first of May send in the corrected 8606 forms for prior years that show the correct basis being entered on your 2012 return. The IRS will have time to match them up with your 2012 filing.
Topic Author
bortery
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Re: Incorrect total basis on form 8606 for a prior year

Post by bortery »

Alan S. wrote:Sounds like your 2010 contribution was non deductible as well, so your basis on your 2010 Form 8606 would be the full amount of your contribution (5,000). Same for 2011 except your 2011 8606 starts with the 5,000 basis from 2010 on line 2 and the current year 5,000 on line 1. Total line 3 of 10,000. Then 10,000 on line 2 of your 2012 8606 plus 5,000 2012 contribution, total basis now 15,000.

On the other hand, if you deducted your 2010 contribution, then your figures are correct and your total basis is now 10,000. If that's the case, why did you file an 8606 for 2010?

If any of these 8606 forms are incorrect, you need to revise them starting with the oldest since the amounts are cumulative. For prior years, you can amend it on a stand alone basis if you return is not otherwise affected.

For your 2012 return, you can enter the correct prior basis (may require you override basis data carried over that is incorrect). Then around the first of May send in the corrected 8606 forms for prior years that show the correct basis being entered on your 2012 return. The IRS will have time to match them up with your 2012 filing.
Ah, I was misusing "total basis," mainly because line 2 on form 8606 says "Enter your total basis:" It should really say "Enter your total basis excluding contributions from line 1." And yes, each contribution was non-deductible. I believe you've answered my question, but to break it down by line, here is what my 8606 currently looks like:

2010 taxes (first year I contributed to a non-deductible TIRA and thus first year I filed an 8606):
Line 1: $5,000
Line 2: $0
Line 3: $5,000

2011 taxes:
Line 1: $5,000
Line 2: $0 (This is where my mistake was made)
Line 3: $5,000

2012 taxes:
Line 1: $5,000
Line 2: $5,000
Line 3: $10,000

So after having read your answer, I believe it should look like:

2010 taxes (first year I contributed to a non-deductible TIRA):
Line 1: $5,000
Line 2: $0
Line 3: $5,000

2011 taxes:
Line 1: $5,000
Line 2: $5,000 (I will send the IRS a 2011 form 8606 in May with this change)
Line 3: $10,000

2012 taxes:
Line 1: $5,000
Line 2: $10,000 (This is how I will file my 2012 taxes, and TurboTax suggests to add an explanatory note)
Line 3: $15,000

Please let me know if anything up there looks incorrect. Thanks!
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

OK, you have it correct now. The amount on line 2 of your 8606 is the amount indicated on the prior year 8606 line 14. If that line 14 is wrong, you can see that the error will just carry forward to later years. With your corrected 8606 forms, you will now have 15,000 of total basis to apply to future conversions or other distributions that you will not have to pay tax on.

The only time line 2 would show another amount is if you rolled over after tax amounts from an employer plan to your TIRA account. In that case, you would also add the after tax amount to line 2 of the next 8606 you would otherwise have to file.
Topic Author
bortery
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Re: Incorrect total basis on form 8606 for a prior year

Post by bortery »

Alan S. wrote:OK, you have it correct now. The amount on line 2 of your 8606 is the amount indicated on the prior year 8606 line 14. If that line 14 is wrong, you can see that the error will just carry forward to later years. With your corrected 8606 forms, you will now have 15,000 of total basis to apply to future conversions or other distributions that you will not have to pay tax on.

The only time line 2 would show another amount is if you rolled over after tax amounts from an employer plan to your TIRA account. In that case, you would also add the after tax amount to line 2 of the next 8606 you would otherwise have to file.
Great, thanks so much! For filing an amended 8606, can i just print off the 8606 from 2011, stick it in an envelope, and send it to the IRS? Maybe add a cover letter too?
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

Yes, that will work. In the attached letter indicate that although your 2011 8606 was incorrect, this revision has no other affect on your 2011 return.
Topic Author
bortery
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Re: Incorrect total basis on form 8606 for a prior year

Post by bortery »

Alan S. wrote:Yes, that will work. In the attached letter indicate that although your 2011 8606 was incorrect, this revision has no other affect on your 2011 return.
Wonderful. Once again, thank you for all of your help!
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dmcmahon
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Re: Incorrect total basis on form 8606 for a prior year

Post by dmcmahon »

I have a friend whose just discovered she made a very similar mistake. Fortunately no tax is due in the earlier years - she caught it for 2012 when she rolled the IRA over into a Roth, so the tax is due this year.

Question: what address should she send the corrected 8606 forms to?
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Duckie
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Re: Incorrect total basis on form 8606 for a prior year

Post by Duckie »

dmcmahon wrote:Question: what address should she send the corrected 8606 forms to?
The same address she would send her 1040 form (the one if "not enclosing a check or money order").
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dmcmahon
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Re: Incorrect total basis on form 8606 for a prior year

Post by dmcmahon »

Duckie wrote:
dmcmahon wrote:Question: what address should she send the corrected 8606 forms to?
The same address she would send her 1040 form (the one if "not enclosing a check or money order").
Not the address for amended returns then. Because we are talking about fixing forms for 5 years prior.
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Duckie
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Re: Incorrect total basis on form 8606 for a prior year

Post by Duckie »

dmcmahon wrote:Not the address for amended returns then. Because we are talking about fixing forms for 5 years prior.
Ok, you got me there. If she is filing the corrected 8606 forms with 1040X forms, then there is a "Where To File" section in the IRS Instructions for Form 1040X. But if she is not including the 1040X forms, and is filing corrected 8606 forms by themselves, I haven't seen anything specifying where they are to be mailed.
sallytravel
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Re: Incorrect total basis on form 8606 for a prior year

Post by sallytravel »

Help!! I have a very similar situation and I am really confused about this basis thing.

I have the exact same situation: contributed to non-dedutible IRA, filed 8606, EXCEPT, I have the same day roll over (when non-deductible IRA was contributed) to Roth-IRA. It was suggested and done by my financial advisor because he said I could do that within tax policy although I am not allowed to file Roth IRA directly. Should I have done the tax the same way for basis mentioned above? Does it make any difference when I did the roll over to Roth?

Version A (correct way?)
2010 taxes (first year I contributed to a non-deductible TIRA):
Line 1: $5,000
Line 2: $0
Line 3: $5,000

2011 taxes:
Line 1: $5,000
Line 2: $5,000
Line 3: $10,000

2012 taxes:
Line 1: $5,000
Line 2: $10,000
Line 3: $15,000

But what i have filed was like this:
Version B:
2010 taxes (first year I contributed to a non-deductible IRA and thus first year I filed an 8606):
Line 1: $5,000
Line 2: $0
Line 3: $5,000

2011 taxes:
Line 1: $5,000
Line 2: $0
Line 3: $5,000

2012 taxes:
Line 1: $5,000
Line 2: $0
Line 3: $5,000

Does it mean I need to refile 2011 and 2012 8606?

Thanks a lot!
sallytravel
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Re: Incorrect total basis on form 8606 for a prior year

Post by sallytravel »

By the way, I did follow turbo tax steps for Roth IRA conversion each year according to the 1099-R form received.
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Epsilon Delta
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Re: Incorrect total basis on form 8606 for a prior year

Post by Epsilon Delta »

sallytravel:

It is possible your forms are filled in correctly. You need to look at the rest of Part I and Part II on the back. These would report the conversion.

If you converted the non-deductible contribution during the same tax year version B is correct as far as it goes, but you would have answered YES to the question below line 3 and filled in the rest of part I, probably with $5,000 on line 8 (amount converted to a Roth). line 12 the non taxable part of the conversion would also be $5,000, line 13 would be $5,000 and line 14 would be zero. Part II on the back of the 8606 would also be filled in.

I'm guessing a bit about what you did, if this is unclear you could post what is actually on these other parts of the form.
sallytravel
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Re: Incorrect total basis on form 8606 for a prior year

Post by sallytravel »

Thank you so much, Epsilon! You are so knowledgeable!
Here is turbo tax put for me:
Line1 5k; Line2 0; Line3 5k, Line5:5k, Line 13 5K *; Line14 0, Line 15 0* Line 16 5k; Line 17 5k, Line18 0*
There is a note for * indicating (From Taxable IRA distribution Wkst (Per IRS Pub 590))

It’s kind of matches with what you said above. Does it mean I am okay and should keep doing this for 2013 with Version B filing?

I also have another question: When I tried to put 10k basis for Line2 on 8606, then Line 3,5 becomes $15k. And most importantly, my itemized deduction goes up by $10k. Why would the # in Line 2( Total basis in traditional IRAs) makes change in deductible?

Subsequently, I noticed TurboTax puts this $10ik on Schedule A (Itemized Deductions) Line #23 and indicating it’s “Loss from total distribution of all traditional IRAs”. What does it mean? Why would they count this as loss when I enter the $10k as basis in Line2 of Form 8606?
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

The misc deduction was generated because the 8606 indicates that you converted (closed) your entire TIRA in an amount that was 10k less than your basis.

Your 8606 should not have the line 2 amount because each year you converted the entire balance and that left no remaining basis on line 14. The line 14 amount from the prior year 8606 is what goes on the current year 8606 line 2, and that amount is properly -0-.

Therefore Version B is correct and A is not. And you don't get the misc itemized deduction if the 8606 is Version B.
sallytravel
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Re: Incorrect total basis on form 8606 for a prior year

Post by sallytravel »

Thanks a lot, Alan! Now it makes sense. :)

One more question, for investment of a 50-year-old. Is it good to do this: Contribute to a non-deductible TIRA and convert it to Roth IRA right away on the same year? My understanding is that all gaining would be tax-free. Any drawbacks?
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Epsilon Delta
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Re: Incorrect total basis on form 8606 for a prior year

Post by Epsilon Delta »

Sallytravel:

Looks like you have everything correct.

If you are not eligible for a deductible IRA the backdoor Roth is almost always a good idea. Money in a Roth is better than money in taxable because growth in the Roth are tax free.
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Epsilon Delta
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Re: Incorrect total basis on form 8606 for a prior year

Post by Epsilon Delta »

duplicate
Last edited by Epsilon Delta on Fri Jan 31, 2014 12:20 pm, edited 1 time in total.
sallytravel
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Re: Incorrect total basis on form 8606 for a prior year

Post by sallytravel »

Cool, thanks!
learning_head
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Re: Incorrect total basis on form 8606 for a prior year

Post by learning_head »

I also have an issue with incorrect basis I had reported last year and it did not affect last years taxes or really any numbers outside of the form. I emailed IRS asking whether I need to file 1040X or new 8606 is sufficient. In short, they said to file 1040X as well since I filed 1040, even though there is no effect on the numbers. Perhaps this will be useful to others:

My question:

===================================================================================================================
Dear Sir or Madam,

I made a mistake on prior year (2013) form 8606. I understated my non-deductible contribution by $500. This mistake does *not* affect my taxes or any numbers outside of the form. It only affects my basis for future years.

Question: can I send corrected 2013 form 8606 with explanation letter or do I need to file 1040X as well? If I do have to file 1040X as well, how do I fill it out and which lines / sections need to be filled out given that my 1040 is not affected by this change?

Thank you
===================================================================================================================

IRS Answer:

===================================================================================================================
Dear Taxpayer,

Thank you for your inquiry.

I assume your question is whether you must file an amended return Form 1040X along with a Form 8606 Nondeductible IRAs to report a correction in the nondeductible contributions you reported on this form.

Your inquiry states it you understated the nondeductible amount on Form 8606 and this understatement does not affect the figures reported on your original Form 1040 that you had filed.

I assume you did not claim this amount as a deductible contribution to a traditional IRA on your original return when filed.

The Form 8606 is a stand-alone form if you had no requirement to file a return. If you filed a Form 1040 then you must file a Form 1040X along with your amended Form 8606.

The following is quoted from the instructions for Form 1040X which can be found on our website www.irs.gov to address how to complete this form if you are reporting information only that has not changes to your original return.
Lines 1 Through 31 Which Lines To Complete
Before looking at the instructions for specific lines, the following information may point you in the right direction for completing Form 1040X.
You are providing only additional information. If you are not changing any dollar amounts you originally reported, but are sending in only additional information, do the following.
Check the box for the calendar year or enter the other calendar or fiscal year you are amending.
Complete name, address, and SSN.
Check a box in Part II, if applicable, for the Presidential Election Campaign Fund.
Complete Part III, Explanation of changes.

In summary, based on the above assumption and quoted information, since you did file a return for that year then you must include the amended Form 8606 with a Form 1040X. Since you are including a revised form that does not affect the dollar amounts you originally reported then complete the Form 1040X as indicated above.

I hope this information assists you with your inquiry. Thank you for using our e-mail service.
===================================================================================================================
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

Too bad the IRS is so inconsistent on this matter. Thousands of people send in 8606 forms every year and do not get them rejected due to no 1040X. In fact many of those forms are for closed tax years that are not even eligible for a 1040X. Perhaps you should have tried that first rather than asking for permission. The 8606 Inst do not mention 1040X, and the Inst only specifically refer to situations where a tax return does not need to be filed. What the Inst should do is make a clear statement that if an 8606 for a prior year needs correction or initial filing, that a 1040X is required even if the 8606 has no affect on the tax return. If the IRS issued clear instructions, they might benefit from more taxpayer consistency. Basically, a similar situation exists for Form 5329 as the 6% excise tax does not affect other parts of a previously filed return.

But thank you for the update as it helps to know how the IRS is evolving on various IRA matters.
Leeraar
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Re: Incorrect total basis on form 8606 for a prior year

Post by Leeraar »

You can file the 8606 by itself, with a letter of explanation.

We went 15 years without a reason to file the form, then we had nondeductible contributions again. The CPA filed an incorrect 8606. It was quite a feat to find the original 8606 from 15 years ago, but then it was easily corrected.

Best practice is to file an 8606 every year, whether you have to or not. Keep it current. If you forget to track your non-deductible basis, it's your loss.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
learning_head
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Re: Incorrect total basis on form 8606 for a prior year

Post by learning_head »

Thanks Alan, Leeraar. I guess I should have just sent it in with a letter, but now I feel like I have to add 1040X too - not a big deal, since filling it out is very easy per their instructions - just basic info at the top, and some simple text explanation box which I would have put in a letter anyway.

However, this makes me think of another question: which 1040X to file? I can download one from 2013 or 2014... I guess it's a general question for any kind of 1040X filing - how do you pick which one to download? Current year when you are filing or the one you are changing? Is there some cut off date that after Jan 1, all 1040X must be filed from the 2014 version?
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Re: Incorrect total basis on form 8606 for a prior year

Post by jplee3 »

Sorry for resurrecting an old thread, but I'm facing a similar issue where I understated the cost basis on my 8606. I put $505 instead of what I think should be $5500 (upon recharacterizing a Roth IRA to tIRA for the 2014 year in Nov 2014).

I asked a friend who is a CPA if it's necessary to file a 1040X in addition to the amended 2014 8606 form and he said only *if* the amendments to the 8606 changes any numbers on my 1040.

Would amending the cost basis that I understated change anything on the 1040? If so, what exactly? It seems there's mixed feedback on whether or not a 1040X is really necessary to send in for something like this. But it also sounds like sending a 1040X also wouldn't hurt? I'm just trying to expedite things so that I can get to filing my 2015 taxes sooner without waiting. I'm currently facing another issue of having to submit an 8606 for 2015 with the correct basis to account for a tIRA to Roth IRA conversion which needs to have the correct basis reported so I'm not overtaxed.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Leeraar »

I am not an accountant, but I think the purpose of 8606 is to track AFTER tax contributions. So, changes should generally not affect your 1040.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
jplee3
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Re: Incorrect total basis on form 8606 for a prior year

Post by jplee3 »

Leeraar wrote:I am not an accountant, but I think the purpose of 8606 is to track AFTER tax contributions. So, changes should generally not affect your 1040.

L.

Thanks! Generally, if I were to fill out the 1040X, would I pretty much just copy everything from my 1040 (with the exception of anything related to 8606) and populate the "A. Original Amount" column while leaving the "B. Net Change" and "C. Correct amount" columns blank?


Also, assuming I need to send this in prior to filing 2015 taxes and I send it say tomorrow, would I be in the clear to then proceed with file taxes by the 4/18 deadline? Or would it be recommended to file for an extension and wait to confirm the IRS has processed the amendment before filing taxes for 2015?

I see here that it may take upwards of 16+ weeks to process an amendment - https://www.irs.gov/Filing/Individuals/ ... d-Return-1
Alan S.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Alan S. »

Just file your return using the corrected 8606 basis information, in other words what you would file had you done the prior 8606 correctly in the first place. The IRS is not going to match this up with your incorrect prior 8606 anytime soon, if ever.

Then file the 1040X and corrected 8606, or the prior year 8606 stand alone if you prefer, anytime after May 1st. The IRS will take months to reconcile this with your 2015 return or to reconcile your 2015 8606 with your prior filed 8606. Therefore, there is no need to be concerned with getting the corrected 8606 to the IRS before you file for 2015.

For a wild guess how much time you have to file the amended 8606, I would say you should get it done by Sept to avoid a possible inquiry from the IRS.
Leeraar
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Re: Incorrect total basis on form 8606 for a prior year

Post by Leeraar »

You can file an 8606 by itself.

A few years ago, my CPA filed a "new" 8606 for me. I pointed out to him that there was an old 8606 from more than ten years ago, so he filed a corrected 8606 by itself. We got a nice letter from the IRS saying they now had the corrected amount.

In my opinion, one should fill out an 8606 every year, even if the numbers don't change. Just keep the darn thing up to date.

They say you only have to keep records and tax returns for seven years. Not true. So far as I can tell, for an 8606 and for HSA accounts, you may have to keep past records forever.

L.
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grabiner
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Re: Incorrect total basis on form 8606 for a prior year

Post by grabiner »

Leeraar wrote:They say you only have to keep records and tax returns for seven years. Not true. So far as I can tell, for an 8606 and for HSA accounts, you may have to keep past records forever.
You only need to keep records which can affect a tax return within the past seven years. If an old record is relevant to a current tax return, you still need to keep it.

HSAs are a good example. I have had an HSA since 2007. If I withdraw from the HSA in 2037 to cover a doctor's bill in 2007, I need the 2007 medical records, and I may also need my 2007 tax form to prove that I didn't deduct those expenses on Schedule A.

Roth IRA contribution records need to be kept until the statute of limitations expires for the year you turned 59-1/2, so that you can withdraw all contributed amounts tax-free before that year.
Wiki David Grabiner
jplee3
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Re: Incorrect total basis on form 8606 for a prior year

Post by jplee3 »

Thanks all for the tips! Good to know I have some time to send the corrected 8606 and that that's all I would need to provide.

Just wanted to run this by a quick consensus-check regarding my cost basis.

If, in 2014, I recharacterized my Roth IRA contributions from all of 2014 to Traditional IRA in November of 2014 and made one more contribution to max out my IRA (@ $5500) in December of 2014, and the Traditional IRA was *not* deductible due to me participating in a company-sponsored 401k + being outside of the AGI limits, then my cost basis should effectively be $5500 right?

And moving forward to 2015, if I converted said Traditional IRA back to a Roth IRA in February and made no additional contributions in either Jan or Feb of 2015, my cost-basis for 2015 *should* remain the same as what it was in 2014 (so $5500), yes?

I just wanted to lay it out in case I'm not right and so I can have the correct understanding.
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Re: Incorrect total basis on form 8606 for a prior year

Post by Leeraar »

grabiner wrote:
Leeraar wrote:They say you only have to keep records and tax returns for seven years. Not true. So far as I can tell, for an 8606 and for HSA accounts, you may have to keep past records forever.
You only need to keep records which can affect a tax return within the past seven years. If an old record is relevant to a current tax return, you still need to keep it.

HSAs are a good example. I have had an HSA since 2007. If I withdraw from the HSA in 2037 to cover a doctor's bill in 2007, I need the 2007 medical records, and I may also need my 2007 tax form to prove that I didn't deduct those expenses on Schedule A.

Roth IRA contribution records need to be kept until the statute of limitations expires for the year you turned 59-1/2, so that you can withdraw all contributed amounts tax-free before that year.
I believe you cannot have an HSA and fund it but not use it and claim a Schedule A medical deduction.

In any event, in your example, won't you have to keep all records so you can prove you did not take an HSA reimbursement for that expense in any year after 2007?

The rules for HSAs are, IMO, incredibly loosey-goosey. I expect that, like backdoor IRAs, the Feds will at sometime train their sights on the issue.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
jplee3
Posts: 1755
Joined: Thu Nov 13, 2014 8:15 pm

Re: Incorrect total basis on form 8606 for a prior year

Post by jplee3 »

BTW: I just realized that I don't think I filed an 8606 for my wife's account in 2014 (I also recharacterized her account to a traditional IRA back then at the same time I did mine). Guess I wasn't paying attention when filing 2014 taxes :(

Given that, is it fine just to go ahead and send a 2014 8606 form for her along with my updated 2014 8606 and include a short explanation/cover letter? We filed jointly.

Also, since I didn't file an 8606 for her, does that change anything as far as timing is concerned with filing amendments *before* proceeding with 2015 taxes? Or is it not filing an 8606 really no different than filing an 8606 with an incorrect/understated basis?'
jplee3
Posts: 1755
Joined: Thu Nov 13, 2014 8:15 pm

Re: Incorrect total basis on form 8606 for a prior year

Post by jplee3 »

Ugh, upon further review, I noticed line 15a of my 2014 1040 doesn't seem right either. The amount on the line only accounts for my IRA and not my wife's (we both recharacterized from roth to traditional in 2014). It seems like now I need to submit an amended 1040x anyway?
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