IRS Form 8606 - Questions

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Topic Author
green tea
Posts: 23
Joined: Fri May 25, 2012 6:01 pm

IRS Form 8606 - Questions

Post by green tea » Fri Nov 15, 2019 4:49 pm

I searched the forum but would like to post to make sure that I am filling out the form correctly .

In April, 2008 my spouse contributed $5,000 (nondeductible) for 2007 tax year. The balance is currently at around $17,000 (capital gain and subsequent years' deductible contributions) . This is the only IRA account my spouse has.

We plan to convert the whole IRA balance to Roth before year-end.

Problem: I don't think we filed form 8606 for tax year 2007. I tried to get the transcript, but the IRS online account only goes back 3 years.
I am planning to just go ahead and send the 2007's 8606 form to IRS this week before we do the conversion.

Question 1: Is this how I should fill out the 2007's Form 8606?
PartI:
Line 1: $5,000
Line 2: 0
Line 4: $5,000
Line 14: $5,000

Question 2: Is this how I should fill out on the 2019's form 8606 for my 2019 Roth conversion?
Part II:
Line16: $17,000
Line 17: $5,000
Line 18: $12,000

Question 3: we also contributed $4,000 non deductible to my IRA account the same year. However, because I had roll over my old 401k to IRA, the nondeductible portion represents less than 1% of my total IRA balance.
Do I need to file the 2007's 8606 form for myself as well, if for simplicity sake, I don't plan to deduct the basis?

Thank you for your advice!

kaneohe
Posts: 5952
Joined: Mon Sep 22, 2008 12:38 pm

Re: IRS Form 8606 - Questions

Post by kaneohe » Fri Nov 15, 2019 5:12 pm

Looks right to me. You don't have to but why not file your 8606. As you have learned it's a few line task. Otherwise you'll be charged on the basis when you withdraw. You'll have to use 8606 when you withdraw but it's only a few more lines.

Topic Author
green tea
Posts: 23
Joined: Fri May 25, 2012 6:01 pm

Re: IRS Form 8606 - Questions

Post by green tea » Fri Nov 15, 2019 5:23 pm

Thank you for your advice, Kaneohe. I will file the 8606 for mine as well.

retiredjg
Posts: 38399
Joined: Thu Jan 10, 2008 12:56 pm

Re: IRS Form 8606 - Questions

Post by retiredjg » Fri Nov 15, 2019 5:31 pm

green tea wrote:
Fri Nov 15, 2019 4:49 pm
Question 1: Is this how I should fill out the 2007's Form 8606?
PartI:
Line 1: $5,000
Line 2: 0
Line 4: $5,000 <---this should be line 3. You never even get to line 4
Line 14: $5,000
Question 2: Is this how I should fill out on the 2019's form 8606 for my 2019 Roth conversion?
Part II:
Line16: $17,000
Line 17: $5,000
Line 18: $12,000
Looks OK to me.

Question 3: we also contributed $4,000 non deductible to my IRA account the same year. However, because I had roll over my old 401k to IRA, the nondeductible portion represents less than 1% of my total IRA balance.
Do I need to file the 2007's 8606 form for myself as well, if for simplicity sake, I don't plan to deduct the basis?
What you do is up to you, but the IRS will not care if you don't file that 8606 and just pay tax on that $4k a second time (assuming you completely empty the IRA eventually).

Topic Author
green tea
Posts: 23
Joined: Fri May 25, 2012 6:01 pm

Re: IRS Form 8606 - Questions

Post by green tea » Fri Nov 15, 2019 6:06 pm

Oops, good catch. Thank Retirejg!!!
I will enter $5,000 on line 3, not 4.

kaneohe
Posts: 5952
Joined: Mon Sep 22, 2008 12:38 pm

Re: IRS Form 8606 - Questions

Post by kaneohe » Fri Nov 15, 2019 6:59 pm

green tea wrote:
Fri Nov 15, 2019 6:06 pm
Oops, good catch. Thank Retirejg!!!
I will enter $5,000 on line 3, not 4.
I was hoping you would say it was a typo and that I read your mind. :happy
I guess we know who the careful ONE is now. Good catch +2

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