IRS Form 8606 Instructions

File a Form 8606 if you made nondeductible contributions to IRAs or if you took income from traditional IRAs, SIMPLE IRAs or SEPs.

IRS Form 8606 is used to report nondeductible contributions to traditional Individual Retirement Arrangements (IRAs), and to report any withdrawals from SEP, SIMPLE or traditional IRAs if you have ever made any nondeductible IRA distributions. You also use the form to report withdrawals from Roth IRAs and conversions from SIMPLE IRAs, traditional IRAs or SEP plans to Roth IRAs. You complete Form 8606 along with your 1040, 1040NR or 1040A and submit it to the IRS along with the rest of your tax return.

Step 1

Determine if you must file a Form 8606. You must file this form if you made nondeductible contributions to a traditional IRA, took income out of a Roth IRA (other than a rollover, recharacterization, or a return of some contributions), if you converted from a SEP, SIMPLE or traditional IRA to a Roth, or if you received income from any of these retirement plans and your tax basis--the amount of after-tax contributions you have made in traditional IRAs--is greater than zero.

Step 2

Gather records. You will need any 1099s you received from the IRA custodians, along with records of any contributions you made.

Step 3

Fill out personal information at the top. If you and your spouse file a join return, use only the name and Social Security number of the person whose information you are reporting. If you both need to file a Form 8606, you must each use a separate form.

Step 4

Complete Part I. Add your total nondeductible IRA contributions for the previous year through April 15 of the following year and enter the result in Line 1. Add your total tax basis in Line 2, and follow the directions for lines 3, 4 and 5. You must add the value of all your SEP and SIMPLE IRAs at year-end, plus any outstanding rollovers, and enter the result in Line 6. Add your distributions from traditional, SEP and SIMPLE IRAs together and enter the result in Line 7. Enter the amount you converted from SEP, SIMPLE and traditional IRAs in Line 8, unless you recharacterized them. Follow the instructions for lines 9 through 15. This will determine your total basis in traditional IRAs.

Step 5

Complete Part II. Do this step only if you converted part or all of your SIMPLE or traditional IRAs or SEP accounts.

Step 6

Complete Part III if you took a distribution from a Roth IRA. You can withdraw up to $10,000 of growth from a Roth IRA penalty-free for a qualifying first-time home purchase.

Step 7

Sign and date the form at the bottom of page 2.


If you fail to file an IRS Form 8606, you may pay a penalty of up to $100.