I know tax day is less than a week away but this is a last minute reminder for everyone who made a nondeductible contribution to an IRA – don’t for Form 8606. Form 8606 covers contributions to Nondeductible IRAs and is important because it will tell the IRS how much you’ve contributed, on a nondeductible basis, to an IRA. When you go to take disbursements or perhaps convert it to a Roth IRA, the Form 8606 will make sure you don’t pay taxes twice.
What if you forgot to file it for past years? Oops. Fortunately, you can still file it for past years but there’s a $50 penalty that can be waived if you have a good reason. You can file a Form 8606 beyond the normal three years (which is how long you have to amend a tax return) and it doesn’t require a Form 1040X (the amended tax return form).
You will need to file one for each year that you made a non-deductible contribution and there isn’t really a list of “good reasons” why you forgot, so good luck with that (it’s a good idea to talk to a tax professional about this).