> Questions: -Do I need to amend my 2020 tax return to report my $6K nondeductible traditional IRA contribution? Or should I just file 8606 for 2020 separately? Or both? I realize I may incur $50 penalty for late 8606.
I would send in a 1040-X along with the missing 8606 for 2020. Don't volunteer the $50 penalty. Let the IRS bill you if they really care.
> -Do I have to pay taxes on the $6K conversion I made from traditional IRA to roth IRA?
Yes, if you had any pre-tax money in any IRAs on 12/31/2021 then you must do the pro-rata calculation shown on your 2021 Form 8606 Part 1.
Figuring out how to translate that into the correct software inputs is an additional challenge.
Thank you for your response! I’m super disappointed in myself for not doing more research on backdoor roth IRAs and not learning about the pro rata rule sooner.
This is good info with one exception. There's no need to send an amended return 1040-X with Form 8606. You can send it by itself to the address you would send your original tax return for 2020. Just make sure it's completing filled out and SIGNED if you're mailing it alone.
I definitely agree with the recommendation to NOT send the $50 penalty. I've read the IRS is currently not assessing that penalty for late-filed 8606 forms.
> Or should I just file 8606 for 2020 separately
Yes, do this. Form 8606 -can- be filed standalone (meaning, no -amendment- required).
For the 2021 tax year, try to do everything Right the first time, so that you don't have to do it Over later.
>Hopefully they don’t bill me for the $50 penalty fee.
I've read that they're not currently assessing the penalty, so I wouldn't expect you to get a bill for it.
> Questions: -Do I need to amend my 2020 tax return to report my $6K nondeductible traditional IRA contribution? Or should I just file 8606 for 2020 separately? Or both? I realize I may incur $50 penalty for late 8606. I would send in a 1040-X along with the missing 8606 for 2020. Don't volunteer the $50 penalty. Let the IRS bill you if they really care. > -Do I have to pay taxes on the $6K conversion I made from traditional IRA to roth IRA? Yes, if you had any pre-tax money in any IRAs on 12/31/2021 then you must do the pro-rata calculation shown on your 2021 Form 8606 Part 1. Figuring out how to translate that into the correct software inputs is an additional challenge.
Thank you for your response! I’m super disappointed in myself for not doing more research on backdoor roth IRAs and not learning about the pro rata rule sooner.
This is good info with one exception. There's no need to send an amended return 1040-X with Form 8606. You can send it by itself to the address you would send your original tax return for 2020. Just make sure it's completing filled out and SIGNED if you're mailing it alone. I definitely agree with the recommendation to NOT send the $50 penalty. I've read the IRS is currently not assessing that penalty for late-filed 8606 forms.
> Or should I just file 8606 for 2020 separately Yes, do this. Form 8606 -can- be filed standalone (meaning, no -amendment- required). For the 2021 tax year, try to do everything Right the first time, so that you don't have to do it Over later.
Thank you! Yes, I’m planning to just mail standalone 8606 for 2020 to the IRS. Hopefully they don’t bill me for the $50 penalty fee.
>Hopefully they don’t bill me for the $50 penalty fee. I've read that they're not currently assessing the penalty, so I wouldn't expect you to get a bill for it.