Filing Form 8606 after 2018 taxes are done

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Topic Author
crossbow
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Filing Form 8606 after 2018 taxes are done

Post by crossbow » Sat Apr 06, 2019 12:08 pm

I filed my taxes in February, however I am just now depositing $5500 into a traditional IRA and converting that balance into a Roth IRA this week. Do I just print and mail 2x Form 8606 off to the IRS? I read that it was supposed to be filed together with my tax return. However I did not think of doing this Traditional -> Roth deposit till after I'd filed my 2018 taxes. The net effect on my taxes would be 0. Would it be ok to not file Form 8606?

lakpr
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Re: Filing Form 8606 after 2018 taxes are done

Post by lakpr » Sat Apr 06, 2019 12:22 pm

Yes it can be filed stand alone.

No, you cannot skip filing it unless you enjoy paying taxes on the $5500 a second time. That is a $2400 mistake at a modest 22% marginal income tax bracket

mbcruiser
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Re: Filing Form 8606 after 2018 taxes are done

Post by mbcruiser » Sat Apr 06, 2019 1:41 pm

If the contribution to the Traditional IRA was designated for 2018 (eligible till April 15, 2019), and the conversion to the ROTH IRA was done now (2019), then you should amend the 2018 tax return to reflect the contribution. The amount converted will appear as a distribution on your 1099-R for 2019 issued at the end of this year and the amount will need to be included in Adjusted Gross Income in the 2019 tax return. The IRA custodian will issue you a Form 5498 soon that will reflect the TIRA contributions for 2018 (if any) and the TIRA's account value as of 12/31/2018. (See https://www.irs.gov/pub/irs-pdf/p590a.pdf and /https://www.irs.gov/pub/irs-pdf/p590b.pdf).
If the contribution to the Traditional IRA was designated for 2019 (eligible till April 15, 2020), and the conversion to the ROTH IRA was done now (2019), the TIRA adjustment will need to be reported on the 2019 return, and the converted amount will be reported as a distribution on the 1099-R for 2019 as above.
8606 instructions also offer detailed information (https://www.irs.gov/pub/irs-pdf/i8606.pdf).

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Earl Lemongrab
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Re: Filing Form 8606 after 2018 taxes are done

Post by Earl Lemongrab » Sat Apr 06, 2019 4:24 pm

mbcruiser wrote:
Sat Apr 06, 2019 1:41 pm
If the contribution to the Traditional IRA was designated for 2018 (eligible till April 15, 2019), and the conversion to the ROTH IRA was done now (2019), then you should amend the 2018 tax return to reflect the contribution.
Amending the return is a needless complication. The OP should file 8606 standalone. At worst the IRS will request an amended return, but probably not.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Mon Apr 08, 2019 2:17 pm

lakpr wrote:
Sat Apr 06, 2019 12:22 pm
Yes it can be filed stand alone.

No, you cannot skip filing it unless you enjoy paying taxes on the $5500 a second time. That is a $2400 mistake at a modest 22% marginal income tax bracket
Thanks for letting me know, I'll file it standalone. I'm curious though - how would I be billed for the 2nd round of taxes if I did not file it standalone? On my following year's return? Does Vanguard report my 2018 conversion (performed on 4/9/2019) to the IRS and send me a tax form for my 2019 tax return?

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Mon Apr 08, 2019 2:18 pm

mbcruiser wrote:
Sat Apr 06, 2019 1:41 pm
If the contribution to the Traditional IRA was designated for 2018 (eligible till April 15, 2019), and the conversion to the ROTH IRA was done now (2019), then you should amend the 2018 tax return to reflect the contribution. The amount converted will appear as a distribution on your 1099-R for 2019 issued at the end of this year and the amount will need to be included in Adjusted Gross Income in the 2019 tax return. The IRA custodian will issue you a Form 5498 soon that will reflect the TIRA contributions for 2018 (if any) and the TIRA's account value as of 12/31/2018. (See https://www.irs.gov/pub/irs-pdf/p590a.pdf and /https://www.irs.gov/pub/irs-pdf/p590b.pdf).
If the contribution to the Traditional IRA was designated for 2019 (eligible till April 15, 2020), and the conversion to the ROTH IRA was done now (2019), the TIRA adjustment will need to be reported on the 2019 return, and the converted amount will be reported as a distribution on the 1099-R for 2019 as above.
8606 instructions also offer detailed information (https://www.irs.gov/pub/irs-pdf/i8606.pdf).
Yes, the contribution is designated for 2018 and conversion to Roth IRA also for 2018. Done this week, before 2018 tax filing deadline. But, my 2018 taxes have been filed already.

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Mon Apr 08, 2019 2:18 pm

Earl Lemongrab wrote:
Sat Apr 06, 2019 4:24 pm
mbcruiser wrote:
Sat Apr 06, 2019 1:41 pm
If the contribution to the Traditional IRA was designated for 2018 (eligible till April 15, 2019), and the conversion to the ROTH IRA was done now (2019), then you should amend the 2018 tax return to reflect the contribution.
Amending the return is a needless complication. The OP should file 8606 standalone. At worst the IRS will request an amended return, but probably not.
Thank you, I will file 8606 standalone.

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Mon Apr 08, 2019 2:50 pm

Where in the world do I send the completed form to. They didn't include a mailing address in either link https://www.irs.gov/pub/irs-pdf/f8606.pdf and https://www.irs.gov/pub/irs-pdf/i8606.pdf :oops:

nolesrule
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Re: Filing Form 8606 after 2018 taxes are done

Post by nolesrule » Mon Apr 08, 2019 3:11 pm

crossbow wrote:
Mon Apr 08, 2019 2:18 pm

Yes, the contribution is designated for 2018 and conversion to Roth IRA also for 2018. Done this week, before 2018 tax filing deadline. But, my 2018 taxes have been filed already.
Conversions are reported based on calendar year. They are not tied to the year a contribution is designated for.

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FiveK
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Re: Filing Form 8606 after 2018 taxes are done

Post by FiveK » Tue Apr 09, 2019 3:02 pm

crossbow wrote:
Mon Apr 08, 2019 2:50 pm
Where in the world do I send the completed form to. They didn't include a mailing address in either link https://www.irs.gov/pub/irs-pdf/f8606.pdf and https://www.irs.gov/pub/irs-pdf/i8606.pdf :oops:
See the bottom of p. 1 of the instructions: "send it to the IRS at the same time and place you would otherwise file Form 1040."

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Tue Apr 09, 2019 11:12 pm

FiveK wrote:
Tue Apr 09, 2019 3:02 pm
crossbow wrote:
Mon Apr 08, 2019 2:50 pm
Where in the world do I send the completed form to. They didn't include a mailing address in either link https://www.irs.gov/pub/irs-pdf/f8606.pdf and https://www.irs.gov/pub/irs-pdf/i8606.pdf :oops:
See the bottom of p. 1 of the instructions: "send it to the IRS at the same time and place you would otherwise file Form 1040."
I already filed my 2018 tax return, and I did it electronically...

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Tue Apr 09, 2019 11:13 pm

For the benefit of anyone else looking for the same information - check out this link - https://www.irs.gov/filing/where-to-fil ... -form-1040

Spirit Rider
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Re: Filing Form 8606 after 2018 taxes are done

Post by Spirit Rider » Tue Apr 09, 2019 11:33 pm

The 2018 Form 8606 would normally be filed with the 2018 return reporting the non-deductible contribution to a traditional IRA. However, since it was not done and the Form 8606 will not change any line items on Form 1040X, there is nothing to report on an amended return.

The IRS will almost always accept Form 8606s reporting just non-deductible contributions and basis changes without an amended return even going back years. I would file the 2018 Form 8606 after May 1st to allow the mad April rush to die down. In a rare case, they may ask for an amended return.

The conversion occurred in 2019 and will be reported on a 2019 Form 8606 and included with the Form 1040 return. If you failed to file that with your 2019 return or changed the amount an amended return must be filed, because the taxable amount would change.

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Wed Apr 10, 2019 12:13 am

Spirit Rider wrote:
Tue Apr 09, 2019 11:33 pm
The 2018 Form 8606 would normally be filed with the 2018 return reporting the non-deductible contribution to a traditional IRA. However, since it was not done and the Form 8606 will not change any line items on Form 1040X, there is nothing to report on an amended return.

The IRS will almost always accept Form 8606s reporting just non-deductible contributions and basis changes without an amended return even going back years. I would file the 2018 Form 8606 after May 1st to allow the mad April rush to die down. In a rare case, they may ask for an amended return.
Thank you.
Spirit Rider wrote:
Tue Apr 09, 2019 11:33 pm
The conversion occurred in 2019 and will be reported on a 2019 Form 8606 and included with the Form 1040 return. If you failed to file that with your 2019 return or changed the amount an amended return must be filed, because the taxable amount would change.
I don't understand this part. Do you mean I need to file a 8606 for my conversion for 2018, that happened this week, with my 2019 return that I will file in 2020? In addition to filing the 8606 this week (or in May as you suggested above)?

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FiveK
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Re: Filing Form 8606 after 2018 taxes are done

Post by FiveK » Wed Apr 10, 2019 1:15 am

crossbow wrote:
Wed Apr 10, 2019 12:13 am
Spirit Rider wrote:
Tue Apr 09, 2019 11:33 pm
The conversion occurred in 2019 and will be reported on a 2019 Form 8606 and included with the Form 1040 return. If you failed to file that with your 2019 return or changed the amount an amended return must be filed, because the taxable amount would change.
I don't understand this part. Do you mean I need to file a 8606 for my conversion for 2018, that happened this week, with my 2019 return that I will file in 2020?
Yes. Because the conversion occurred in 2019, it is a 2019 event. The contribution year doesn't matter when discussing conversions, thus the strike-through in the quote.
In addition to filing the 8606 this week (or in May as you suggested above)?
Yes. There are multiple reasons for which one must file form 8606. See the form and its instructions.

Katietsu
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Re: Filing Form 8606 after 2018 taxes are done

Post by Katietsu » Wed Apr 10, 2019 2:34 am

You do NOT have a 2018 conversion. In your mind you are contributing for 2018 and then converting the 2018 money as one grouping of actions. In IRS terms, these are two separate actions. Your conversion from a traditional IRA to a Roth happened in 2019. So it is part of 2019 just like the wages you earned last week. You could have left the money in the traditional IRA and converted in 2020 instead, for instance, reporting the conversion in 2020 then. You have no other traditional IRA account value, correct?

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Thu Apr 11, 2019 10:41 pm

Katietsu wrote:
Wed Apr 10, 2019 2:34 am
You do NOT have a 2018 conversion. In your mind you are contributing for 2018 and then converting the 2018 money as one grouping of actions. In IRS terms, these are two separate actions. Your conversion from a traditional IRA to a Roth happened in 2019. So it is part of 2019 just like the wages you earned last week. You could have left the money in the traditional IRA and converted in 2020 instead, for instance, reporting the conversion in 2020 then. You have no other traditional IRA account value, correct?
Ah! I see now. Thank you! Yes, I do not have any other traditional IRA account/account value. So I will
Step 1: file form 8606 now to report my non-deductible 2018 contribution, and
Step 2: file another form 8606 with my 2019 tax return to report the conversion in 2020.

Topic Author
crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Thu Apr 11, 2019 10:42 pm

FiveK wrote:
Wed Apr 10, 2019 1:15 am
crossbow wrote:
Wed Apr 10, 2019 12:13 am
Spirit Rider wrote:
Tue Apr 09, 2019 11:33 pm
The conversion occurred in 2019 and will be reported on a 2019 Form 8606 and included with the Form 1040 return. If you failed to file that with your 2019 return or changed the amount an amended return must be filed, because the taxable amount would change.
I don't understand this part. Do you mean I need to file a 8606 for my conversion for 2018, that happened this week, with my 2019 return that I will file in 2020?
Yes. Because the conversion occurred in 2019, it is a 2019 event. The contribution year doesn't matter when discussing conversions, thus the strike-through in the quote.
In addition to filing the 8606 this week (or in May as you suggested above)?
Yes. There are multiple reasons for which one must file form 8606. See the form and its instructions.
Thank you! What you and Katietsu said really helped me understand what's going on. :happy

Spirit Rider
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Re: Filing Form 8606 after 2018 taxes are done

Post by Spirit Rider » Thu Apr 11, 2019 11:24 pm

crossbow wrote:
Thu Apr 11, 2019 10:41 pm
Ah! I see now. Thank you! Yes, I do not have any other traditional IRA account/account value. So I will
Step 1: file form 8606 now to report my non-deductible 2018 contribution, and
Step 2: file another form 8606 with my 2019 tax return to report the conversion in 2020.
Note: If you make a 2019 non-deductible contribution to a traditional IRA by 4/15/2019, your 2019 Form 8606 will have an entry for that contribution as well as the 2019 Roth conversion of the 2018 contribution. Also, If you were to make the 2019 contribution and also did a Roth conversion of it during 2019, you would report the 2019 non-deductible contribution and a total of both Roth conversions on the 2019 Form 8606.

This is all keeping with; Contributions are reported for the tax year of the contribution even if made the next year by 4/15 and Roth conversions are always reported for the calendar tax year they actually occur in.

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crossbow
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Re: Filing Form 8606 after 2018 taxes are done

Post by crossbow » Mon Apr 15, 2019 6:08 pm

Spirit Rider wrote:
Thu Apr 11, 2019 11:24 pm
crossbow wrote:
Thu Apr 11, 2019 10:41 pm
Ah! I see now. Thank you! Yes, I do not have any other traditional IRA account/account value. So I will
Step 1: file form 8606 now to report my non-deductible 2018 contribution, and
Step 2: file another form 8606 with my 2019 tax return to report the conversion in 2020.
Note: If you make a 2019 non-deductible contribution to a traditional IRA by 4/15/2019, your 2019 Form 8606 will have an entry for that contribution as well as the 2019 Roth conversion of the 2018 contribution. Also, If you were to make the 2019 contribution and also did a Roth conversion of it during 2019, you would report the 2019 non-deductible contribution and a total of both Roth conversions on the 2019 Form 8606.

This is all keeping with; Contributions are reported for the tax year of the contribution even if made the next year by 4/15 and Roth conversions are always reported for the calendar tax year they actually occur in.
Thank you! I filed a 2018 Form 8606 to report my $5500 contribution this morning.
Next week, I'll contribute $6,000 into my Traditional IRA and convert that into my Roth IRA.
When I'm filing my 2019 taxes next year, I'll report a $6,000 contribution and a $11,500 conversion on my 2019 Form 8606.

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