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Hi,
I contributed to 2012 IRA (in Jan 2013) and after finishing the taxes realized I cannot deduct the amount from my taxes due to high AGI. I withdrew the money from my IRA.What forms do I have to file with IRS?
I didnt receive any forms from my financial institute and was told I will
receive the 1099-R in Jan 2014

Thanks
Sreeni
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I contributed to 2012 IRA (in Jan 2013) and after finishing the taxes realized I cannot deduct the amount from my taxes due to high AGI. I withdrew the money from my IRA.What forms do I have to file with IRS?I didnt receive any forms from my financial institute and was told I will receive the 1099-R in Jan 2014
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Well, if you had asked first, you might have been advised that you could just leave the money there, and classify it as a nondeductible IRA. And you also could have converted the account to a Roth IRA, regardless of your income. (This is what's known as a back-door Roth contribution.)

And you still have unti April 15 to re-do it, with either option still available. And amending your return won't be necessary.

Did you include a Form 8606 with your return? You should have. Either way you made a nondeductible IRA contribution for 2012, and you're going to get a 1099-R for 2013. The withdrawal in 2013 will be nontaxable.

I think this is the case where you can file a Form 8606 by itself, without an amended return. But you do have to sign the form when doing that.

Bill
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I meant to say "Well, if you had asked first, you might have been advised that you could just leave the money there, and classify it as a nondeductible contribution.

Bill
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Hi,
Thanks for the reply.I haven't filed taxes for 2012 still.
Should I file 8606 with my taxes? My reasoning for
withdrawal was the tracking needed for my non-deductable
portion of IRA.

Sreeni
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Hi,
Thanks for the reply.I haven't filed taxes for 2012 still.
Should I file 8606 with my taxes? My reasoning for
withdrawal was the tracking needed for my non-deductable
portion of IRA.

Sreeni

=========================
Yes, it would serve to document the nontaxable nature of the withdrawal that will be reported on your 1099-R for 2013.

Bill
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I contributed to 2012 IRA (in Jan 2013) and after finishing the taxes realized I cannot deduct the amount from my taxes due to high AGI. I withdrew the money from my IRA.What forms do I have to file with IRS?

Did you address earnings or just withdraw the contribution amount? I suspect the latter, in which case you have a 2012 contribution and a 2013 withdrawal. Whether you like or not or intended to or not, you made a nondeductible 2012 contribution, which you document in Part I of Form 8606 filed with your 2012 return.

Your custodian will send you a 2013 1099-R documenting the withdrawal. You will use Part I of your 2013 Form 8606 to compute the taxable portion, if any, of that withdrawal. If you're under 59 1/2 the taxable portion will also be subject to the 10% penalty.

Piling on Bill, next time try asking before you act, not after.

Phil
Rule Your Retirement Home Fool

P.S. If by chance you do not have any other traditional IRA money, including SEPs, SIMPLEs or rollovers from prior employer plans, let us know. You can do the back door Roth contribution Bill mentioned with little, if any, effect on your taxes.

P
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Hi Phil,

Thanks for the reply. I am using Turbotax to do 2012 taxes.
Will it complete the 8606 form? The original intent was
to contribute to IRA and roll-over to Roth IRA but then
I read your Taxes2013 "cheat" sheet and realised I cannot
do the roll-over as I rolled over my previous 401K to
a roll-over IRA.

BTW thanks for the Taxes2013 Cheat sheet. Very enlightening

Sreeni
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I am using Turbotax to do 2012 taxes.
Will it complete the 8606 form?


It should. If it doesn't, you've led it astray somewhere along the line. If you're using the interview it should ask you whether you made an IRA contribution and take it from there. If you're doing forms mode you just enter the amount of the contribution on line 1 of the 8606.

BTW, we were so busy lecturing you that we forgot to ask whether your MAGI is too high for a straightforward Roth contribution. I assume it is, but just checking to make sure.

Phil
Rule Your Retirement Home Fool
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Hi,

My MAGI is high for a straight ROTH IRA contribution.

Sreeni
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