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Tue Feb 13, 2018, 12:10 PM

On Friday I finished working on the tax return, or so I though

Cannot submit it yet, said TurboTax on the web, the IRS is not ready to accept one form. Until Feb. 15 (I hope).

And the form is: why? the 8606, of course. The one that we have to file for the rest of our lives because when we rolled our 401K from a former employer to an IRA, one agent did not alert us about the "after tax" part. In the employer reports that sum was labeled as "pre 1987" contributions.

Since these are individual accounts, we each had to do our own rollover with different agents. One of them, converting mine, immediately said that my after tax would be cashed out. My spouse's was not. Yes, with the mighty Vanguard.

It was some years later when we wanted to take the money out and I really did not believe the CPA so I called the IRS. These were the days when IRS agents did spend as much time as needed with a caller - at least in the summer. That agent was adamant: cash the after tax amount, buy a car, get on a cruise, don't roll it over. While the employers do keep tabs on that amount, once you roll it over it is all mixed together.

Why, then, I asked, is this not publicized? Because, he admitted, there are not that many who are in this situation. (Unless, I suppose, people do mix them..)

I really feel sorry for the IRS employees. First, every year, congress waits for the last minute to make some changes. And now, this tax "reform" also came by the end of the year and the poor IRS employees have to rush to, at least, give employers their new tables for withholding.


Wanted to add: form 8606 is used when one takes money from IRA - as when it is time for Required Minimal Withdrawal after the age of 70 1/2.

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Reply On Friday I finished working on the tax return, or so I though (Original post)
question everything Feb 13 OP
unblock Feb 13 #1
question everything Feb 13 #2
Yonnie3 Feb 13 #3

Response to question everything (Original post)

Tue Feb 13, 2018, 12:14 PM

1. iirc, mrs. unblock was able to roll her "after tax" portion into a roth ira.

at least i think so. this was many moons ago....

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Response to unblock (Reply #1)

Tue Feb 13, 2018, 12:16 PM

2. Right move. Except then we did not have Roth IRA..

Perhaps this would have been the time to open one.

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Response to question everything (Original post)

Tue Feb 13, 2018, 01:05 PM

3. I file 8606 too

I filed 8606 after making excess contributions to my IRA rather than getting them back. Now, I use them to calculate the non-taxable part of my distributions from the IRA.

I've tried three of the free online tax services and all of them could not seem to handle 8606 correctly in spite of their statements that they do. One even told me to submit a 1040 with an incorrect amount (double the retirement payments I received) as it didn't change my tax amount. I told them no, I wouldn't knowingly submit an incorrect form to the IRS. I tried to find a specific address or email at the IRS to inform them of these issues with no luck. I did send a letter to a more general address and received no response.

I filed paper that year and continue to do so. I refuse to pay for services I can do myself. Manual filing takes a lot less time than the interview style of input. And a lot less time than doing it three times. I make sure I have paid close to what I owe, so there is no hurry to get a refund.

Your post reminded me that the last time I checked the IRS did not have the 2017 instructions ready. They are ready now. The instructions note that some changes this year are for special withdrawals associated with 2017 disasters. I can understand this being a bit late.

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