Forgot to file 1099R- IRS sent me a big bill to pay

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keith6014
Posts: 164
Joined: Thu Jan 02, 2014 11:58 pm

Forgot to file 1099R- IRS sent me a big bill to pay

Post by keith6014 » Fri May 19, 2017 8:44 pm

I made a non- deductible contribution of 5500 for 2013 tax year and 5500 for 2014 . Then converted both to backdoor Roth in 2014.

in my 2015 tax return, i forgot to file these contributions. i received a letter from IRS to pay the tax/fine on those.

What are my options now? as it's still within the 3 year statute to file corrections, how do i go about doing that?

mhalley
Posts: 5137
Joined: Tue Nov 20, 2007 6:02 am

Re: Forgot to file 1099R- IRS sent me a big bill to pay

Post by mhalley » Fri May 19, 2017 9:20 pm

If they were non deductable contributions, then you would only owe taxes on the gains. Did you file form 8606?

https://www.irahelp.com/forum-post/1467 ... 06-filings

retiredjg
Posts: 30617
Joined: Thu Jan 10, 2008 12:56 pm

Re: Forgot to file 1099R- IRS sent me a big bill to pay

Post by retiredjg » Sat May 20, 2017 8:47 am

You should have filed Form 8606 with your 2013 taxes and another one for 2014 taxes. The 2014 Form 8606 would cover both the second contribution and the conversion of all of it to Roth.

Your 2015 tax return is not involved at all.

Tell us what you did and if you filed the two Forms 8606 and we'll tell you how to fix it. It is possible that no amendment is needed.

keith6014
Posts: 164
Joined: Thu Jan 02, 2014 11:58 pm

Re: Forgot to file 1099R- IRS sent me a big bill to pay

Post by keith6014 » Sat May 20, 2017 10:00 am

I did not file form 8606 with any of the tax return. IRA is using the amounts shown of the 1099 R distributions when converted from Traditional to roth.

Reading about these, i am seeing that i would need to file 8606 retroactively and then also submit amended tax return to include 1099 R form. Is that right?

Thanks

retiredjg
Posts: 30617
Joined: Thu Jan 10, 2008 12:56 pm

Re: Forgot to file 1099R- IRS sent me a big bill to pay

Post by retiredjg » Sat May 20, 2017 11:22 am

You need to fill out 2 Forms 8606, one for each year you made a non-deductible contribution. For the 2nd year, you also need to fill out the roth conversion part on the back of the Form 8606. Forms for old tax years are available on the internet.

I do not know if you need to amend your tax return or not. If no extra tax was due, just the Forms 8606 might be enough.

The roth conversion part of the form is what documents the conversion shown on your 1099R form. The IRS already has that form.

What has happened here is the IRS knows you did the Roth conversion. However, you have not shown them why that conversion was not taxable. If you had sent in the forms showing your non-deductible contributions, they would have understood and not sent you this letter.

Here is more information. Follow the links to find information about what the forms should look like. You can fill them out by hand if you want.

https://thefinancebuff.com/the-backdoor ... ow-to.html

keith6014
Posts: 164
Joined: Thu Jan 02, 2014 11:58 pm

Re: Forgot to file 1099R- IRS sent me a big bill to pay

Post by keith6014 » Sat May 20, 2017 8:16 pm

Thanks

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