What Do You Need to Know About Form 8606?
Information about Form 8606, Nondeductible IRAs, including recent updates, related forms, and instructions on how to file. Form 8606 is used to report certain contributions and distributions to/from specific types of IRAs. Use Form 8606 to report: About Form 8606, Nondeductible IRAs | Internal Revenue Service Skip to main content
When to file Form 8606 for a SEP IRA?
Form 8606 must usually be filed each year that distribution occurs from a Traditional, SEP or SIMPLE IRA if any of your Traditional or SEP IRAs hold after-tax amounts. Failure to file Form 8606 could result in the individual paying income tax and an early-distribution penalty on amounts that should be tax and penalty free.
What is the penalty for not filing Form 8606?
Either way, the statement must be submitted along with the tax return. An individual who fails to file Form 8606 to report a non-deductible contribution will owe the IRS a $50 penalty. Additionally, if the non-deductible contribution amount is overstated on the form, a penalty of $100 will apply.
