Instructions For Form 8606 - 2016 (Page 6 of 13) in pdf

Penalty for Not Filing

If you meet these conditions and are

Year(s)

Contribution

otherwise required to file Form 8606:

If you are required to file Form 8606 to

limit

limit if age

Don’t take into account the amount of

50 or older at

report a nondeductible contribution to a

the withdrawn contributions in figuring

the end of

traditional IRA for 2016, but don’t do so,

line 2 (for 2016 or for any later year),

the year

you must pay a $50 penalty, unless you

and

can show reasonable cause.

2013

$5,500

$6,500

Don’t include the amount of the

through

withdrawn contributions on line 7.

Overstatement Penalty

2015

Example. You are single, you retired

If you overstate your nondeductible

2008

$5,000

$6,000

in 2013, and you had no taxable

contributions, you must pay a $100

through

compensation after 2013. However, you

penalty, unless you can show

2012

made traditional IRA contributions (that

reasonable cause.

2006 or

$4,000

$5,000

you didn’t deduct) of $3,000 in 2014 and

2007

What Records Must I

$4,000 in 2015. In November 2016, a

tax practitioner informed you that you

2005

$4,000

$4,500

Keep?

had made excess contributions for

2002

$3,000

$3,500

To verify the nontaxable part of

those years because you had no

through

distributions from your IRAs, including

taxable compensation. You withdrew

2004

Roth IRAs, keep a copy of the following

the $7,000 and filed amended returns

1997

$2,000

—

forms and records until all distributions

for 2014 and 2015 reflecting the

through

are made.

additional 6% tax on excess

2001

Page 1 of Forms 1040 (or Forms

contributions on Form 5329. You

1040A, 1040NR, or 1040-T) filed for

before 1997

$2,250

—

include the $7,000 distribution on your

each year you made a nondeductible

2016 Form 1040, line 15a, enter -0- on

contribution to a traditional IRA.

line 15b, and attach a statement to your

Forms 8606 and any supporting

If the excess contribution to your

return explaining the distribution,

statements, attachments, and

traditional IRA for the year included a

including the fact that you filed

worksheets for all applicable years.

rollover and the excess occurred

amended returns for 2014 and 2015 and

Forms 5498, IRA Contribution

because the information the plan was

paid the additional 6% tax on the excess

Information, or similar statements you

required to give you was incorrect,

contributions for those years. The

received each year showing

increase the contribution limit amount

statement indicates that the distribution

contributions you made to a traditional

for the year shown in the table above by

isn’t taxable because (a) it was made

IRA or Roth IRA.

the amount of the excess that is due to

after the due dates of your 2014 and

Forms 5498 or similar statements you

the incorrect information.

2015 tax returns, including extensions;

received showing the value of your

(b) your total IRA contributions for each

If the total contributions for the year

traditional IRAs for each year you

year didn’t exceed $5,500 ($6,500 if age

included employer contributions to a

received a distribution.

50 or older at the end of that year); and

SEP IRA, increase the contribution limit

Forms 1099-R or W-2P you received

amount for the year shown in the table

for each year you received a

contributions, and no deduction was

above by the smaller of the amount of

distribution.

allowable because you didn’t have any

the employer contributions or:

taxable compensation for those years.

Note. Forms 1040-T and W-2P are

2015

$53,000

The statement also indicates that the

forms that were used in prior years.

distribution reduced your excess

2014

$52,000

contributions to -0-, as reflected on your

Specific Instructions

2013

$51,000

2016 Form 5329. Don’t file Form 8606

2012

$50,000

for 2016. If you are required to file Form

Name and social security number

8606 in a year after 2016, don’t include

2009, 2010, or 2011

$49,000

(SSN). If you file a joint return, enter

the $7,000 you withdrew in 2016 on

only the name and SSN of the spouse

2008

$46,000

line 2.

whose information is being reported on

2007

$45,000

Form 8606. If both you and your spouse

Amending Form 8606

2006

$44,000

are required to file Form 8606, file a

Generally, after you file your return, you

separate Form 8606 for each of you.

2005

$42,000

can change a nondeductible

2004

$41,000

contribution to a traditional IRA to a

Part I—Nondeductible

deductible contribution or vice versa if

2002 or 2003

$40,000

Contributions to

you make the change within the time

Traditional IRAs and

2001

$35,000

limit for filing Form 1040X, Amended

Distributions From

U.S. Individual Income Tax Return (see

before 2001

$30,000

When To File in the Form 1040X

Traditional, SEP, and

Instructions). You also may be able to

SIMPLE IRAs

make a

recharacterization

(discussed

Include the total amount distributed

earlier). If necessary, complete a new

on Form 1040, line 15a; Form 1040A,

Line 1

Form 8606 showing the revised

line 11a; or Form 1040NR, line 16a; and

If you used the IRA Deduction

information and file it with Form 1040X.

attach a statement to your return

Worksheet in the Form 1040, 1040NR,

explaining the distribution. See

or 1040A instructions, subtract line 12

Example, later.

Instructions for Form 8606 (2016)

Instructions For Form 8606 - 2016 Page 6

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