ira distribution
lll
years ago i opened an ira account and didn’t deduct it from my earnings.
am i able to show some of my disributions as tax free in this year 2008?
lll
years ago i opened an ira account and didn’t deduct it from my earnings.
am i able to show some of my disributions as tax free in this year 2008?
Permalink Submitted by Alan Spross on Wed, 2008-02-20 20:08
Yes, but first you must file a proper Form 8606 for each year you made non deductible contributions. Start with the oldest year because these forms list a cumulative total. These can be filed stand alone without an amended return as they do not affect the prior tax bill.
You would then report your distribution on Form 8606 also and the form calculates how much of your distribution is tax free based on pro rating the non deductible contributions portion of the total year end balance in all your traditional IRA accounts.
Just make sure that you did not open a Roth IRA for any of those years or the above does not apply.
Also, if the year was 2004 or later AND you were eligible to deduct the contribution, you can file an amended return to claim the deduction instead of the 8606 to document non deductible contributions.