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Today's tax question comes from Rose in Ohio. She asks: You can file Form 8606 to report contributions to a non-deductible IRA, even if it's late.
"I made non-deductible IRA contributions for 2003-2005 and 1993 and 1994 and failed to file Form 8606. (Total 5) I never deducted the contributions on my tax return. If I submit Form 8606 now for each of those years, will that satisfy the IRS without incurring a penalty? I am 66 years old and have never taken a distribution. Also do I need to submit an amended 1040?"
Rose, you came to the right place to ask this tax question! I researched this last year, and here's what the IRS told me:

"Although Form 8606 is normally submitted with a timely filed Form 1040, the IRS will process a late-filed Form 8606 - even one that is filed after the normal three-year statute of limitations for claiming a refund has expired. The Form 8606 can be submitted without a Form 1040 or Form 1040X...."

You should file Form 8606 to report your basis in a non-deductible individual retirement account. File one Form 8606 for each year that you made non-deductible contributions. This will establish your basis in the IRA. You would then be eligible either to convert your non-deductible IRAs into Roth IRAs, or you could begin taking distributions from the non-deductible IRAs. You should work with a tax professional to help you figure out if converting to a Roth would make financial sense for you.

The penalty for filing Form 8606 late is $50. However, the IRS sometimes waives this penalty if you can show reasonable cause for why the forms are filed late.

You have additional options for your IRA contributions for 2003 through 2005. You can treat those as deductible or non-deductible. To claim the deduction, you would need to file an amended tax return using Form 1040X. You can only do this within 3 years from the original filing deadline. So if you wanted to claim an IRA deduction for tax year 2003, you will need to file that amendment by April 17, 2007. (This is the last day to claim a tax refund for the 2003 tax year.) You can read all the interesting details about what to do if your need to file Form 8606 late in my previous article, Forgot to Claim IRA Deduction.

IRS Forms and Instructions: Form 8606 (PDF) | Instructions for Form 8606

Do you have a tax question? Visit the Ask a Tax Question page. Disagree with my answers? Post your comments in the Tax Forum.

Comments
March 31, 2008 at 10:47 pm
(1) Kyra says:

Great article – and just the info I was looking for. I already did my taxes and my accountant said I can go ahead and submit the form myself. I cannot find where this form should be sent. The IRS website does not have the info for this form. Should it be sent to the same location my tax preparer sent my 1040? I live in California if that matters. Any help would be appreciated! thanks

March 1, 2011 at 11:46 am
(2) Jimmy Boy says:

Had the same issue…
instructions:
http://www.irs.gov/instructions/i8606/ch01.html#d0e599

February 24, 2012 at 2:15 pm
(3) Yoko Miura says:

I have a question on Form 8606.

I had the distribution of over $13,000 last year in 2011. Do I need to file this form?

thank you,

Yoko Miura

August 11, 2013 at 4:00 pm
(4) DB says:

Was reviewing my tax records, and it looks like I missed filing 8606 in 1999. But, I did so thereafter. Thus, my cost basis is $2,000 off!

Do I need to re-file all of the subsequent years, or just that year?

August 13, 2013 at 12:34 am
(5) William Perez says:

DB, you’ll probably need to re-file all your Forms 8606 to get the basis corrected. You may want to ask the IRS just to make sure.

April 9, 2014 at 5:41 pm
(6) pratyush says:

Hi,

I filed my 2013 taxes already and only now decided to use traditional IRA contributions and thereafter a roth IRA conversion. I understand that I will need to file 8606 once my funds are deposited to tIRA account. My question is, can I go ahead and do the roth conversion already or do I need to wait to file 8606? In later case, I will lose the ability to convert it for 2013 since the deadline is only 6 days away.

thanks,

April 13, 2014 at 1:00 pm
(7) Lisa Vee says:

I need to file a form 8606, but I cannot find an address where to send it. I have already filed my 2013 taxes, and I live in VA. Thanks.

April 13, 2014 at 11:35 pm
(8) William Perez says:

Lisa Vee, the IRS is instructing us to “send it to the Internal Revenue Service at the same time and place you would otherwise file Form 1040, 1040A, or 1040NR. Be sure to include your address on page 1 of the form and your signature and the date on page 2 of the form” (From the Instructions for Form 8606). Mailing addresses for the Form 1040 series (on IRS.gov). Thanks for reading.

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