{"id":16724,"date":"2019-07-30T08:00:26","date_gmt":"2019-07-30T13:00:26","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=16724"},"modified":"2019-08-08T15:53:05","modified_gmt":"2019-08-08T20:53:05","slug":"avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/","title":{"rendered":"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions"},"content":{"rendered":"<p>Clients may assume that if something isn\u2019t either taxable income or a tax deduction for the current year, they don\u2019t need to tell their tax professional about it. But, sometimes those things can have a big impact down the road.<\/p>\n<p>Nondeductible contributions to a traditional IRA are a prime example of this. This can happen when a client\u2019s income is over the threshold for making a deductible contribution. Those limits are surprisingly low if a taxpayer, or his or her spouse, is covered by a retirement plan at work. When taxable income is over the limit, the deductible portion of an IRA contribution begins to phase out, until the top of the phase-out range is reached.<\/p>\n<p><b>Beware of Low Income Limits for Deductible Contributions<\/b><\/p>\n<p>To see how low those limits are, here are the phase-out ranges for 2019:<\/p>\n<ul>\n<li>Single taxpayer covered by a retirement plan at work: $64,000 to $74,000.<\/li>\n<li>Married couple filing jointly and the person making the IRA contribution are covered by a retirement plan at work: $103,000 to $123,000.<\/li>\n<li>Married couple filing jointly and the person making the IRA contribution are not covered by a retirement plan at work, but the spouse is covered: $193,000 to $203,000.<\/li>\n<li>Married person filing separately is making an IRA contribution and is covered by a retirement plan at work: $0 to $10,000.<\/li>\n<\/ul>\n<p>If no one on the tax return is covered by a retirement plan at work, the limits don\u2019t apply.<\/p>\n<p><b>Nondeductible IRA Contributions Create Basis<\/b><\/p>\n<p>If your client falls into one of these situations, then any nondeductible IRA contributions create basis in their IRA. While nondeductible IRA contributions don\u2019t impact the current year\u2019s taxes, they can have a big impact when the IRA owner starts taking distributions.<\/p>\n<p>The default assumption for distributions from a traditional IRA is that the whole distribution is taxable. However, if that person has basis in any of their traditional IRAs, then a pro-rata portion of their total IRA distributions will be a return of basis, and thus excluded from taxable income.<\/p>\n<p>Sounds simple, right?<\/p>\n<p><b>How Is Basis Tracked?<\/b><\/p>\n<p>Except that the IRS expects taxpayers to track IRA basis themselves. This is done by filing <a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-8606\"title=\"\"  target=\"_blank\" rel=\"false noopener noreferrer\" data-wa-link=\"body_irs-aboutform8606\" target=\"_blank\">Form 8606<\/a>, <i>Nondeductible IRAs<\/i>, when nondeductible contributions are made to a traditional IRA. Form 8606 is also used to calculate the taxable portions of traditional IRA distributions when the taxpayer has basis, taxes due on conversions to Roth IRAs, and distributions from Roth IRAs. This form is only required when one of those circumstances occurs during the current tax year.<\/p>\n<p>As I mentioned above, clients might not realize how important this form will be in the future because that nondeductible contribution doesn\u2019t impact their taxes this year. This means that when your clients start taking distributions from a traditional IRAs, if you don\u2019t know that they have basis in their IRAs, they might pay too much tax.<\/p>\n<p><b>What Are the Remedies?<\/b><\/p>\n<p>If your client hasn\u2019t filed Form 8606 for prior years, that form can be filed on a standalone basis, and even after the usual three-year limit for requesting a refund. There may be a $50 penalty for failing to file Form 8606 when it was required, but it\u2019s possible to have that penalty waived for reasonable cause. Since this isn\u2019t changing taxable income, no 1040X is required.<\/p>\n<p>The stance of the IRS has long been that without any history of filing Form 8606, there\u2019s no basis. However, a few recent court cases have forced the IRS to take a broader approach, and to accept other evidence a taxpayer might have. This might be a prior year tax return that doesn\u2019t show a deduction for an IRA contribution, combined with an IRA statement that shows a contribution was made.<\/p>\n<p>This means that besides filing Form 8606, it\u2019s a good idea for advisors to assist their clients in tracking their basis. Other than the history of filing Form 8606, the IRS doesn\u2019t actively track basis. Investment advisors may not have any records of basis either.<\/p>\n<p>This is especially a problem for inherited IRAs. If your client inherits an IRA, it\u2019s a good idea to request prior year tax returns for the decedent to see if Form 8606 was ever filed. It may also be a good idea to ask for IRA statements that show contributions.<\/p>\n<p>Filing Form 8606 might seem like a hassle when it doesn\u2019t impact taxable income, but the future impact of not filing it can be huge. So, be sure to ask your clients about all of their IRA contributions!<\/p>\n<p><strong>Editor&#8217;s note:<\/strong> This article was originally published on the <a href=\"https:\/\/www.firmofthefuture.com\/content\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/\"title=\"\"  target=\"_blank\" rel=\"false noopener noreferrer\" data-wa-link=\"body_fof-form8606\" target=\"_blank\">Firm of the Future blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Help your tax clients properly report their IRA contributions on IRS Form 8606 to avoid future taxes.<\/p>\n","protected":false},"author":121049762,"featured_media":10820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rkv_reviewed_by_select":[],"rkv_browse_by_id":0,"rkv_cta_id":0,"rkv_optimize_for_pagespeed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"useModifiedDate":false,"customPublishDate":"","customModifiedDate":"","_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[509474089],"tags":[],"intuit_collection":[],"intuit_series":[],"coauthors":[577370804],"class_list":["post-16724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-law-and-news"],"header_image":"","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Form 8606 for Nondeductible IRA Basis<\/title>\n<meta name=\"description\" content=\"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions - Tax Pro Center | Intuit\" \/>\n<meta property=\"og:description\" content=\"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/\" \/>\n<meta property=\"og:site_name\" content=\"Tax Pro Center | Intuit\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/IntuitAccountants\" \/>\n<meta property=\"article:published_time\" content=\"2019-07-30T13:00:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-08-08T20:53:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"655\" \/>\n\t<meta property=\"og:image:height\" content=\"365\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Liz Farr, CPA\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@IntuitAccts\" \/>\n<meta name=\"twitter:site\" content=\"@IntuitAccts\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Liz Farr, CPA\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/\"},\"author\":{\"name\":\"Liz Farr, CPA\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#\\\/schema\\\/person\\\/8cd3f4117733fed8b492bd7b1c339035\"},\"headline\":\"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions\",\"datePublished\":\"2019-07-30T13:00:26+00:00\",\"dateModified\":\"2019-08-08T20:53:05+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/\"},\"wordCount\":774,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2015\\\/12\\\/money-conversation-e1535552434150.jpg\",\"articleSection\":[\"Tax Law and News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/\",\"name\":\"Form 8606 for Nondeductible IRA Basis\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2015\\\/12\\\/money-conversation-e1535552434150.jpg\",\"datePublished\":\"2019-07-30T13:00:26+00:00\",\"dateModified\":\"2019-08-08T20:53:05+00:00\",\"description\":\"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#primaryimage\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2015\\\/12\\\/money-conversation-e1535552434150.jpg\",\"contentUrl\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2015\\\/12\\\/money-conversation-e1535552434150.jpg\",\"width\":655,\"height\":365,\"caption\":\"Save my money\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/tax-law-and-news\\\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#website\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/\",\"name\":\"Tax Pro Center | Intuit\",\"description\":\"Tax Pro Center\",\"publisher\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#organization\",\"name\":\"Tax Pro Center | Intuit\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2022\\\/10\\\/Tax_Pro_Center_Logo_Final_large.webp\",\"contentUrl\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/wp-content\\\/uploads\\\/2022\\\/10\\\/Tax_Pro_Center_Logo_Final_large.webp\",\"width\":872,\"height\":160,\"caption\":\"Tax Pro Center | Intuit\"},\"image\":{\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/IntuitAccountants\",\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/IntuitAccts\",\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/intuitaccountants\\\/?hl=en\",\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/company\\\/intuit-accountants\\\/\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/#\\\/schema\\\/person\\\/8cd3f4117733fed8b492bd7b1c339035\",\"name\":\"Liz Farr, CPA\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/avatar\\\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/avatar\\\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g\",\"contentUrl\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/avatar\\\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g\",\"caption\":\"Liz Farr, CPA\"},\"description\":\"Liz has been a CPA since 2005 and spent 15 years working as an accountant with a focus on tax work. She also worked on audits, business valuations, and litigation support. Since 2018, she\u2019s been a full-time freelance writer, and has written articles on technical accounting topics, blog posts, case studies, white papers, web content, and full-length books for accountants and bookkeepers around the world. Her current specialty is ghostwriting for thought leaders in accounting.\",\"url\":\"https:\\\/\\\/accountants.intuit.com\\\/taxprocenter\\\/author\\\/lizfarrtax\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Form 8606 for Nondeductible IRA Basis","description":"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/","og_locale":"en_US","og_type":"article","og_title":"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions - Tax Pro Center | Intuit","og_description":"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.","og_url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/","og_site_name":"Tax Pro Center | Intuit","article_publisher":"https:\/\/www.facebook.com\/IntuitAccountants","article_published_time":"2019-07-30T13:00:26+00:00","article_modified_time":"2019-08-08T20:53:05+00:00","og_image":[{"width":655,"height":365,"url":"https:\/\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","type":"image\/jpeg"}],"author":"Liz Farr, CPA","twitter_card":"summary_large_image","twitter_creator":"@IntuitAccts","twitter_site":"@IntuitAccts","twitter_misc":{"Written by":"Liz Farr, CPA","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#article","isPartOf":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/"},"author":{"name":"Liz Farr, CPA","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#\/schema\/person\/8cd3f4117733fed8b492bd7b1c339035"},"headline":"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions","datePublished":"2019-07-30T13:00:26+00:00","dateModified":"2019-08-08T20:53:05+00:00","mainEntityOfPage":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/"},"wordCount":774,"commentCount":0,"publisher":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#organization"},"image":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#primaryimage"},"thumbnailUrl":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","articleSection":["Tax Law and News"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/","url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/","name":"Form 8606 for Nondeductible IRA Basis","isPartOf":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#website"},"primaryImageOfPage":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#primaryimage"},"image":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#primaryimage"},"thumbnailUrl":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","datePublished":"2019-07-30T13:00:26+00:00","dateModified":"2019-08-08T20:53:05+00:00","description":"Filing Form 8606 for nondeductible IRA contributions prevents clients from being double-taxed later. Learn phase-out ranges and when to track basis with this form.","breadcrumb":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#primaryimage","url":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","contentUrl":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","width":655,"height":365,"caption":"Save my money"},{"@type":"BreadcrumbList","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/avoid-future-taxes-by-filing-form-8606-for-nondeductible-ira-contributions\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/accountants.intuit.com\/taxprocenter\/"},{"@type":"ListItem","position":2,"name":"Avoid Future Taxes by Filing Form 8606 for Nondeductible IRA Contributions"}]},{"@type":"WebSite","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#website","url":"https:\/\/accountants.intuit.com\/taxprocenter\/","name":"Tax Pro Center | Intuit","description":"Tax Pro Center","publisher":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/accountants.intuit.com\/taxprocenter\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#organization","name":"Tax Pro Center | Intuit","url":"https:\/\/accountants.intuit.com\/taxprocenter\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#\/schema\/logo\/image\/","url":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2022\/10\/Tax_Pro_Center_Logo_Final_large.webp","contentUrl":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-content\/uploads\/2022\/10\/Tax_Pro_Center_Logo_Final_large.webp","width":872,"height":160,"caption":"Tax Pro Center | Intuit"},"image":{"@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/accountants.intuit.com\/taxprocenter\/IntuitAccountants","https:\/\/accountants.intuit.com\/taxprocenter\/IntuitAccts","https:\/\/accountants.intuit.com\/taxprocenter\/intuitaccountants\/?hl=en","https:\/\/accountants.intuit.com\/taxprocenter\/company\/intuit-accountants\/"]},{"@type":"Person","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/#\/schema\/person\/8cd3f4117733fed8b492bd7b1c339035","name":"Liz Farr, CPA","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/accountants.intuit.com\/taxprocenter\/avatar\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g","url":"https:\/\/accountants.intuit.com\/taxprocenter\/avatar\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g","contentUrl":"https:\/\/accountants.intuit.com\/taxprocenter\/avatar\/09f96bae675baf6f039537d16b30e3af2ee2045fc65eaf8be24ad350cd7586f9?s=96&d=identicon&r=g","caption":"Liz Farr, CPA"},"description":"Liz has been a CPA since 2005 and spent 15 years working as an accountant with a focus on tax work. She also worked on audits, business valuations, and litigation support. Since 2018, she\u2019s been a full-time freelance writer, and has written articles on technical accounting topics, blog posts, case studies, white papers, web content, and full-length books for accountants and bookkeepers around the world. Her current specialty is ghostwriting for thought leaders in accounting.","url":"https:\/\/accountants.intuit.com\/taxprocenter\/author\/lizfarrtax\/"}]}},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2015\/12\/money-conversation-e1535552434150.jpg","jetpack_shortlink":"https:\/\/wp.me\/pazjGh-4lK","jetpack-related-posts":[{"id":9833,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/nondeductible-ira-contributions-and-completing-form-8606\/","url_meta":{"origin":16724,"position":0},"title":"Nondeductible IRA Contributions and Completing Form 8606","author":"Robert Westley, CPA\/PFS, CFP\u00ae","date":"September 13, 2017","format":false,"excerpt":"Hear from Robert Westley, CPA\/PFS, CFP, about nondeductible IRA contributions and completing Form 8606 to help you better serve clients in the retirement accumulation phase of the lifecycle.","rel":"","context":"In &quot;Tax Law and News&quot;","block_context":{"text":"Tax Law and News","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/tax-law-and-news\/"},"img":{"alt_text":"Couple With Financial Advisor","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2017\/10\/couple-with-tax-accountant-e1535552596416.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2017\/10\/couple-with-tax-accountant-e1535552596416.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2017\/10\/couple-with-tax-accountant-e1535552596416.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":2105,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/tax-tips-and-tricks-using-iras\/","url_meta":{"origin":16724,"position":1},"title":"Tax Tips and Tricks Using IRAs","author":"T. Steel Rose, CPA, CPA Magazine","date":"April 7, 2016","format":false,"excerpt":"Most tax decisions must be made prior to year-end each year. One important exception for clients to know is that the filing deadline for Individual Retirement Account (IRA) contributions falls on the same day as tax day. Tax day is normally April 15, but this year, taxpayers and preparers get\u2026","rel":"","context":"In &quot;Tax Law and News&quot;","block_context":{"text":"Tax Law and News","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/tax-law-and-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2016\/04\/nest-egg1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2016\/04\/nest-egg1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2016\/04\/nest-egg1.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":70988,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/key-deductions-and-credits-for-2025-tax-returns\/","url_meta":{"origin":16724,"position":2},"title":"5 key deductions and credits for 2025 tax returns","author":"April Moore, MBA","date":"January 7, 2026","format":false,"excerpt":"Don't let your clients leave money on the table! Get a list of 5 key tax saving strategies in this timely article from April Moore.","rel":"","context":"In &quot;Tax Law and News&quot;","block_context":{"text":"Tax Law and News","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/tax-law-and-news\/"},"img":{"alt_text":"5 key deductions and credits for 2025 tax returns","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2026\/01\/5-key-deductions-and-credits-for-2025-tax-returns-copy.jpeg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2026\/01\/5-key-deductions-and-credits-for-2025-tax-returns-copy.jpeg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2026\/01\/5-key-deductions-and-credits-for-2025-tax-returns-copy.jpeg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2026\/01\/5-key-deductions-and-credits-for-2025-tax-returns-copy.jpeg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":24510,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/irs-announces-changes-to-retirement-plans-for-2022\/","url_meta":{"origin":16724,"position":3},"title":"IRS announces changes to retirement plans for 2022","author":"Intuit Accountants Team","date":"December 22, 2021","format":false,"excerpt":"Get an updated list of retirement contribution limits for 2022.","rel":"","context":"In &quot;Tax Law and News&quot;","block_context":{"text":"Tax Law and News","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/tax-law-and-news\/"},"img":{"alt_text":"Retirement Savings","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/11\/Retirement-Savings.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/11\/Retirement-Savings.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/11\/Retirement-Savings.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/11\/Retirement-Savings.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":59726,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/stacking-capital-loss-harvesting-with-a-sep-contribution\/","url_meta":{"origin":16724,"position":4},"title":"Stacking capital loss harvesting with a SEP contribution","author":"Bhairavi Parikh, CPA","date":"April 24, 2025","format":false,"excerpt":"Get more info on a practical strategy that can help your clients save taxes: Engaging in capital loss harvesting and SEP IRA contributions in the same tax year.","rel":"","context":"In &quot;Tax Law and News&quot;","block_context":{"text":"Tax Law and News","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/tax-law-and-news\/"},"img":{"alt_text":"Stacking capital loss harvesting with a SEP contribution","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2025\/04\/Stacking-capital-loss-harvesting-with-a-SEP-contribution-copy.jpeg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2025\/04\/Stacking-capital-loss-harvesting-with-a-SEP-contribution-copy.jpeg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2025\/04\/Stacking-capital-loss-harvesting-with-a-SEP-contribution-copy.jpeg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2025\/04\/Stacking-capital-loss-harvesting-with-a-SEP-contribution-copy.jpeg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":22661,"url":"https:\/\/accountants.intuit.com\/taxprocenter\/practice-management\/roth-ira-and-roth-401k-planning-strategies\/","url_meta":{"origin":16724,"position":5},"title":"Roth IRA and Roth 401(K) planning strategies","author":"Jim Buffington, CPA","date":"March 23, 2021","format":false,"excerpt":"Explore the advantages of tax-free Roth plan strategies, and how to incorporate them as part of wealth management.","rel":"","context":"In &quot;Practice Management&quot;","block_context":{"text":"Practice Management","link":"https:\/\/accountants.intuit.com\/taxprocenter\/category\/practice-management\/"},"img":{"alt_text":"Roth IRA","src":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/03\/Roth-IRA.jpeg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/03\/Roth-IRA.jpeg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/03\/Roth-IRA.jpeg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/taxprocenter.proconnect.intuit.com\/wp-content\/uploads\/2021\/03\/Roth-IRA.jpeg?resize=700%2C400&ssl=1 2x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/posts\/16724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/users\/121049762"}],"replies":[{"embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/comments?post=16724"}],"version-history":[{"count":7,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/posts\/16724\/revisions"}],"predecessor-version":[{"id":16732,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/posts\/16724\/revisions\/16732"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/media\/10820"}],"wp:attachment":[{"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/media?parent=16724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/categories?post=16724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/tags?post=16724"},{"taxonomy":"intuit_collection","embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/intuit_collection?post=16724"},{"taxonomy":"intuit_series","embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/intuit_series?post=16724"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/accountants.intuit.com\/taxprocenter\/wp-json\/wp\/v2\/coauthors?post=16724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}