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Can anyone tell me about the Federal requirement to file this form with the annual 1040? It is for nondeductible contributions to an IRA. I have never filed this in over ten years. Am I in big trouble, small trouble, or none at all? How do I get this corrected from here?

My advice is to file the old ones by themselves and bring your 2000 one up to date. Also make sure that you've kept all your records of contributions and your returns for the years in question.

The 8606 Part I is how you establish the previously-taxed basis in a traditional IRA. It will be an issue only when you start to take withdrawals and need to recover that basis tax-free.

Don't worry about the $50 penalty mentioned in the 8606 instructions. I don't think they've ever imposed it.

Phil Marti
VITA Volunteer
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