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September 27, 2022

Should I File Form 8606 every year?


Should I File Form 8606 every year?

Question: Filing Form 8606 I made a nondeductible contribution to my traditional IRA two years ago. I have not made an IRA contribution since then. I know I should file IRS Form 8606 for the contribution. Should the Form 8606 also be filed for every year after?

FAQ IRA Questions
FAQ – Frequently Asked Questions

Answer by Denise Appleby: It depends. IRS Form 8606 is used to track the basis (after-tax amounts) in your IRA. Once you make a nondeductible contribution or roll over any after-tax amount to your traditional IRA, any subsequent distribution or Roth conversion will include a pro-rated amount of your pre-tax and after-tax balance. For this purpose, all your traditional, SEP and SIMPLE IRAs are aggregated and treated as one.

Therefore, if you took any distribution or made a Roth IRA conversion from any traditional IRA, SEP IRA or SIMPLE IRA that you own, you must file IRS Form 8606 for those distributions or Roth conversions. The Form 8606 will let you and the IRS know how much of the distribution or Roth conversion is taxable.


Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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