Roth Conversion & Form 8606
I made a Roth conversion in 2010. Since I wanted to report all conversion income in 2010 (vs. splitting between 2010/2011), I entered all of the conversion income on my 2010 Form 1040, line 15a. However, I did not complete/file a Form 8606. Must I amend my 2010 return to include Form 8606? Also, I made a Roth conversion in 2009, reported the conversion income on my 1040, but did not file a Form 8606 for that year either. Thank you in advance for your answer.
Permalink Submitted by Alan Spross on Sat, 2011-07-02 17:58
While the IRS would not show you owing any more total tax, you should still file the 8606 forms to clarify what you did. The Roth custodian will send out a 5498 for each year which tells the IRS that you converted to a Roth, so the IRS will be looking for an 8606. Moreover, for 2010 the default option for conversions is to split the income, so there is a risk that the IRS will require that you do that and not tell you until the deadline date of 10/17/2011 has passed, and it is too late to change your mind.
Therefore, in order to prevent any unanticipated consequences, you should file a 1040X for each year and add the 8606 form reporting the conversions. For the 2010 form be sure to check the box on line 19 to show that you elect to report all the income in 2010.