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If you arent required to file an income tax return but are required to file Form 8606, sign Form 8606 and send it to the IRS at the same time and place you would otherwise file Form 1040, 1040-SR, or 1040-NR. Be sure to include your address on page 1 of the form and your signature and the date on page 2 of the form.
Any money you contribute to a traditional IRA that you do not deduct on your tax return is a nondeductible contribution. You still must report these contributions on your return, and you use Form 8606 to do so. Reporting them saves you money down the road.
Well automatically generate and fill out Form 8606 (Nondeductible IRAs) if you reported any of these on your tax return: Nondeductible contributions made to a traditional IRA.
Can IRS Form 8606 be e-filed? You can e-file Form 8606 with the rest of your annual tax return when you e-file your 1040 and any other tax forms, along with any payments due.
Failure to file Form 8606 for a distribution could result in the IRA owner (or beneficiary) paying income tax and the additional 10% early distribution penalty tax on amounts that should be tax free.
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Here you will complete the following if applicable: Total basis in traditional IRAs. List any contributions that were made between January and April 15th before the return due date. Total value all your traditional, SEP, and SIMPLE IRAs as of December of the tax year. Any outstanding rollovers.
At a minimum, taxpayers who fail or forget to file Form 8606 should expect to receive an inquiry from the IRS, asking them to explain and verify their nondeductible contributions. Avoiding such an inquiry or an audit is a good reason to file the form.
You must file Form 8606 for every year when you contribute after-tax amounts (nondeductible contributions) to your traditional IRA. Conversions from traditional, SEP, or SIMPLE IRAs also must be reported on Form 8606.
Find a download of the IRS form 8606 from the IRS website. Follow the steps listed on the form. Attach this form to your Form 1040.