Past TIRA contributions and form 8606

Submitted by BruceM on Thu, 2008-01-10 22:02

If an individual has made after tax contributions in previous years to his TIRA, but did not know to file an 8606, may he do this this year for each year he didn’t file if he has the supporting 5498’s?

Pub 590 speaks of a $50 penalty for failure to file an 8606, but doesn’t mention retroactive filing. Because there really isn’t an ammendment required of past returns, I would think this wouldn’t be subject to the 3 year ammendment rule.

Thanks

BruceM



Submitted by Alan Spross on Thu, 2008-01-10 22:16

Bruce,

The IRS has been accepting these retroactive 8606 filings for several years without levying the penalty, but anyone affected should get these filed ASAP before they change their mind, and/or take a distribution that could be partially tax free. Any Roth conversions would also benefit from establishing any IRA basis. He does not need to submit the 5498, since the IRS (in theory) has all these. Obviously, he should be sure he did not take a deduction for any of the years, as that WOULD cause a problem if an 8606 came into later.

Ideally, each year’s 8606 should be completed starting with the oldest, since the basis will accumulate. If there has been any distributions in the meantime, this gets more complex and could then involve amending any open tax years as part of the process if there were distributions.

Submitted by BruceM on Fri, 2008-01-11 00:24

Alan
As I suspected. Also its interesting that the IRS isn’t penalizing….at least for now. I’ll pass this along

Thanks much

BruceM

Submitted by Josh Comay on Sun, 2008-03-16 20:09

I failed to file an 8606 for [b]2006[/b] for a non-deductible contribution to a traditional IRA and am wondering the following things:

1) Do I need to submit a 1040X as well as the 8606?
2) If not, should a note be submitted with explanation?

Thanks in advance,

jc

Submitted by Alan Spross on Mon, 2008-03-17 00:40

Since this has no affect, and presuming that you did not take a deduction on your return, you can file the 8606 stand alone. Download the correct year’s edition, and be sure to pick up the correct prior information because these forms are cumulative.

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