IRS Form 8606 Line-by-Line Instructions 2023: How to File Form 8606, Step by Step. Learn IRS rules for reporting data on nondeductible IRAs on Form 8606 in 2023. Watch now and take some notes.
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If you’re someone who has made non-deductible contributions to a traditional IRA or has converted a traditional IRA to a Roth IRA, you may need to file IRS Form 8606. This form is used to report these contributions and conversions to the IRS, ensuring that you don’t end up paying taxes on the same money twice. In this article, we will provide a detailed line-by-line guide on how to fill out Form 8606 for the 2023 tax year.
Line 1: Enter the total amount of non-deductible contributions you made to traditional IRAs for the tax year. If you made any contributions to a Roth IRA, those should be included on this line as well.
Line 2: If you made any rollover contributions from traditional IRAs to Roth IRAs during the tax year, enter the total amount of those contributions on this line.
Line 3: Add lines 1 and 2 together to get the total amount of contributions and conversions for the tax year.
Line 4: If you made any distributions from your traditional IRAs during the tax year, enter the total amount of those distributions on this line.
Line 5: If any part of the distributions on line 4 were from non-deductible contributions, enter the total amount of those contributions on this line. This amount will not be subject to tax.
Line 6: Subtract line 5 from line 4 to get the taxable amount of your distributions.
Line 7: If you made any conversions from traditional IRAs to Roth IRAs during the tax year, enter the total amount of those conversions on this line.
Line 8: Add lines 6 and 7 together to get the total taxable amount of your distributions and conversions.
Line 9: If you made any distributions from Roth IRAs during the tax year, enter the total amount of those distributions on this line.
Line 10: If any part of the distributions on line 9 were from conversions from traditional IRAs, enter the total amount of those conversions on this line.
Line 11: Subtract line 10 from line 9 to get the total amount of distributions from Roth IRAs that are not subject to tax.
Line 12: If any of the distributions on line 9 were from earnings on Roth IRA contributions or conversions, enter the total amount of those earnings on this line.
Line 13: Add lines 8, 11, and 12 together to get the total taxable amount of your distributions and conversions from Roth IRAs.
Line 14: If you made any recharacterizations of IRA contributions during the tax year, enter the total amount of those recharacterizations on this line.
Line 15: Add lines 13 and 14 together to get the total taxable amount of your distributions, conversions, and recharacterizations.
Line 16: If you were born before January 2, 1954, enter $100,000. If you were born after January 1, 1954, enter $125,000.
Line 17: If the amount on line 15 is less than the amount on line 16, subtract line 15 from line 16 to get the excess.
Line 18: Multiply the excess on line 17 by 10% to get the additional tax owed.
Line 19: If any of the distributions on line 9 were from conversions from traditional IRAs in the previous five years, check the box on this line.
Line 20: If you made any contributions to a Coverdell ESA or QTP during the tax year, enter the total amount of those contributions on this line.
Line 21: If you made any distributions from a Coverdell ESA or QTP during the tax year, enter the total amount of those distributions on this line.
Line 22: If you made any contributions to an HSA or Archer MSA during the tax year, enter the total amount of those contributions on this line.
Line 23: If you made any distributions from an HSA or Archer MSA during the tax year, enter the total amount of those distributions on this line.
Line 24: Add lines 20 and 22 and subtract lines 21 and 23 to get the net contributions to ESAs, QTPs, HSAs, and Archer MSAs.
Line 25: If you made any withdrawals from ESAs, QTPs, HSAs, or Archer MSAs during the tax year, enter the total amount of those withdrawals on this line.
Line 26: Subtract line 25 from line 24 to get the net income on ESAs, QTPs, HSAs, and Archer MSAs.
Filing Form 8606 can be a complex process, but by following these line-by-line instructions and consulting with a tax professional if necessary, you can ensure that you accurately report your IRA contributions and conversions to the IRS for the 2023 tax year. So, taking it step by step will help you accurately report your IRA contributions and conversions to the IRS for the 2023 tax year.
In 2021 I rolled over my Employee 401k into a traditional IRA. Within the 401 K was $49465.00 in aftertax Contributions. In 2022 I converted that amount into a Roth IRA, I was also required to take an RMD distribution from my IRA. My 1099R shows a distribution that combines the two amounts. I have watched the video but stilled confused how to fill out form 8086
If my wife and I are both contributing to a Roth IRA for 2023 (6500 max conversion for each) and are planning to file jointly come tax time, do we need to each file a form 8606?
In 2021, I put $7,000 from my savings account into a non-deductible traditional IRA. Within several weeks, I noticed that, due to the stock market downturn, I was losing money on the self-directed stocks I chose. I stopped the investments and put the money back into my regular savings account. I lost approx. $8.00 on the amount I had in this IRA. Do I have to report my withdrawal on form 8606? I do not have any other IRA's.
Hi , I transferred post tax money to traditional IRA for year 2022 on March 2023. Conversion to Roth IRA for year 2022 in March 2023. So what should I enter in line 3 , 4 and 5 of part 1 in form 8606? I assume it is 0 from line 6 to 15 except 14. I don’t need to fill part -II as I did conversion in March for previous year .
FORM 8606 TOTAL BASIS BALANCE WHEN I DIE. How does my spouse handle the balance?
where do i send it to ? im in California, thanks
Good information, not sure that it covers what I'm looking for. I have an inherited Roth that I did a rollover distribution this year into a new Roth. Do I need to fill out the form 8606 as it's a Roth to Roth conversion.
thanks for the video. have a question. for line 8 about conversion, if we contribute between jan and march 2021 for 2020 IRA, that should be 0, right? Mainly I contributed to the previous year IRA(2020) in 2021 and conversion also happened in 2021 which makes all the lines from 6 to 15 all zero except line 14. Correct?
Hopefully, you can help me out, say over the last 4 years I contributed 20k into my ROTH IRA and now 2022 I want to take out 10k of my contributions (not gains), how do I fill Part III out?
excellent video! I have a question about part 3 of the form. I contributed $250 into my ROTH IRA in 2021, then I later took out that $250 without having invested it. How should I fill out part 3, do I only write $250 for line 19? Part 1 and 2 doesn't apply to me. I would greatly appreciate it if you could help me out!
can I contribute $11000?
The information in this video was so helpful. We explained. Thank you.
Hello again! Just one more question. Filling out the 8606 2021 form. Part 2, I did 5,000 conversion this year( line 16)The question is on part 3 line 24 do I include the 5,000 from 2021 to this amount. ( in the past the only other total conversion was 2,000. So line 24 would be 2,000 or do I add the 5,000 which would make line 24. 7,000 my total conversion basis? I apologize for such a long question! God bless my friend. Steve ny
This is what I need clarified: I have a 401K which was established by my employer back in the 1970's. I have never personally added money to the IRA . Last year I decided to follow the guidelines found on Vanguards site to do a conversion of $10,000 from the IRA to my Roth IRA. Now I am getting together my taxes and trying to understand what needs to be filled out the F. 8606. Hopefully you can tell me what lines need to be entered to properly report the conversion. I withdrew the RMD first. Next I followed Vanguards guide to move the money from my 401K to my Roth IRA. Do I need to fill out the F.8606 and attach it to my 1040? I am confused and need to know how I should enter the $10,000 conversion on the form. Hope you will provide the answers. Thanks you for the great video. Carl
I have been contributing after tax money to my Roth IRA since 2013, and have never filed a form 8606 because I didn’t know. For the year 2021, I withdrew my Roth IRA contributions of $19k. I now received a 1099-R. What should I do?
I think I understand the details that matters to me.
I plan to open a traditional IRA and make a non-deductible cash deposit into it for the year 2021. This deposit would bring me to my $6000 IRA contribution limit for the 2021 tax year. I plan to immediately roll it into my (existing) Roth IRA.
1. Because I made the deposit in the year 2022, I don't need to file 8606 for the year 2021 (although I could, if I wanted).
2. For the 2022 tax year, I need to file 8606 parts I and II. As for the intricate details, I will worry about it, then.
3. Since I have no other earnings or deductible assets in any traditional IRA accounts (traditional 401(k) stuffs doesn't count, right?), I won't need to pay any additional taxes when filling out the form next year.
Am I correct in all this?
Thank you very much for your help and this lovely video!