Non Deducted Contribution
If someone were to make an IRA contribution for 2007 which should have been deducted but was not, since it is now too late to amend the return, is it now possible to file Form 8606 to indicate that a non-deductible contribution was made ? (Even though the person was eligible for the deduction).
Permalink Submitted by Alan Spross on Wed, 2012-01-18 20:15
Yes, the IRS has been accepting an 8606 for closed tax years without charging the $50 penalty. This is the obvious solution for this person to avoid eventually paying taxes twice on that contribution. The 2007 edition of Form 8606 can be sent in without a 1040X.