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IRA basis and conversions

Form 8606 Guide

Understand when Form 8606 is required for nondeductible traditional IRA contributions, IRA basis, Roth conversions, and Roth IRA distributions.

8606

Nondeductible IRAs

Decision point

Use this guide when

  • You made a nondeductible contribution to a traditional IRA.
  • You took a traditional, SEP, or SIMPLE IRA distribution and have traditional IRA basis.
  • You converted traditional, SEP, or SIMPLE IRA money to a Roth IRA.
  • You received a Roth IRA distribution that must be reported on Form 8606.

Read the document

Key boxes, columns, and parts

Location Label What it means Next destination
Part I Traditional IRA basis and distributions Tracks nondeductible contributions and computes the nontaxable share of applicable traditional IRA distributions. Keep with the form records.
Line 1 Current-year nondeductible contributions Reports the nondeductible traditional IRA contribution for the year. Keep with the form records.
Line 2 Prior-year basis Carries forward basis from prior Forms 8606 and applicable adjustments. Keep with the form records.
Year-end value input Aggregate IRA value The pro-rata calculation generally considers the year-end value of all traditional, SEP, and SIMPLE IRAs covered by the instructions. Keep with the form records.
Part II Roth conversions Reports amounts converted from traditional, SEP, or SIMPLE IRAs to Roth IRAs and computes taxable amount. Keep with the form records.
Part III Roth IRA distributions Determines the taxable portion and any amount relevant to additional tax. Keep with the form records.

Follow the amounts

From source document to tax return

  1. 1. Reconstruct IRA basis

    Gather prior Forms 8606 and records of nondeductible contributions.

  2. 2. Reconcile Forms 1099-R and 5498

    Match distributions, conversions, contributions, and year-end account information. Open the related tool →

  3. 3. Apply the Form 8606 pro-rata calculation

    Follow the current instructions across all IRAs included by the aggregation rule.

  4. 4. Carry taxable amounts to Form 1040

    Transfer the result to the applicable IRA distribution lines.

  5. 5. Check additional tax

    Use Form 5329 when an additional tax or exception must be reported. Open the related tool →

Before filing

Four checks that prevent common errors

  • Keep every prior Form 8606 until all basis has been recovered.
  • Do not calculate the taxable share using only the IRA that made the distribution when the aggregation rule applies.
  • Reconcile conversions and distributions to Forms 1099-R.
  • Retain Forms 5498 and year-end account statements supporting contributions and values.

Continue the workflow

Related guides and calculators

Roth conversion calculator

Estimate tax on a planned conversion.

Open

Form 1099-R guide

Decode the distribution statement.

Open

Form 5329 guide

Check additional tax and exceptions.

Open

Common questions

Form 8606 FAQ

Do regular Roth IRA contributions require Form 8606?

Not solely because you made a regular Roth IRA contribution. Form 8606 can still apply to Roth conversions or certain Roth IRA distributions.

Why does prior-year basis matter?

Prior nondeductible contributions create after-tax basis. Form 8606 carries that basis forward so the same dollars are not taxed again when distributed or converted.

Can I calculate one IRA separately?

The Form 8606 instructions generally aggregate the traditional, SEP, and SIMPLE IRAs covered by the pro-rata rule rather than isolating one account.

Sources