INSTRUCTIONS : NONDEDUCTIBLE IRAs (Form 8606)
Form 8606 is a United States Internal Revenue Service tax form used to report any type of non-deductible IRA contributions throughout the tax year.
Form 8606 can be obtained through the I.R.S’ website or by obtaining the documents through a local tax office.
This form is to be filed along with an individual 1040 tax return.
1. At the top of the form, supply you name and social security number.
2. Only fill out the contact information in the top box if you are submitting this form for any other reason than with your annual tax return. (Some reasons may include modifying a previously submitted form or for rollover purposes)
3. In part I, you must supply a complete list of all non-deductible contributions to traditional IRAs and distributions from all traditional, SEP, and SIMPLE IRAs.
4. Include the total amount of each contribution and deduction from your IRA account in the appropriate lines from line 1 to 14. You must calculate the correct amounts using the formulas provided. When you have completed all calculations, you must enter your final taxable amount on line 15. This amount will be the basis for your tax on withdrawals.
5. If, during the tax year, you converted any traditional, SEP, or SIMPLE IRA account in to a Roth IRA, you must report this in Part II.
6. Enter the amount converted on line 16. subtract this amount form your nontaxable portion. When completed, you must enter your taxable amount under the conversion on line 18.
7. If you have received any distributions from Roth IRAs during the tax year, you must report this on part III of the Form 8606.
8. From lines 19 to 35, calculate your Roth IRA distributions and use the calculations for each line to determine your total taxable amount. Enter this total amount on line 36.
9. If you have received distributions from Designated Roth IRA accounts, you must use part IV to calculate your total taxable amount. Follow the instructions on lines 39 to 47 to determine your taxable amount.
10. Do not sign the bottom portion of the form, unless you are submitting it outside of your regular yearly income tax return. If filed separately, you and your tax preparer must certify the Form 8606.
11. Submit the document to the IRS and retain a copy for your personal records.
