How should I keep track of my non-deductible IRA contributions to accurately report them on Form 8606?

Calculating the Non-Deductible Portion of Traditional IRA Contributions for Form 8606

To calculate the non-deductible portion of traditional IRA contributions for accurate reporting on IRS Form 8606, follow these steps:

1. Determine Total IRA Contributions  

- Calculate the total amount of contributions made to all your traditional IRAs for the tax year.

2. Identify Deductible Contributions

- Determine the portion of your contributions that are deductible. This depends on factors such as your income, filing status, and whether you or your spouse are covered by a retirement plan at work.

3. Calculate Non-Deductible Contributions

- Subtract the deductible portion from the total contributions to find the non-deductible portion.

4. Complete Form 8606

- Use the non-deductible contribution amount when filling out Form 8606, which is used to report non-deductible contributions to traditional IRAs as well as distributions from IRAs when there is a mix of deductible and non-deductible contributions.

5. Maintain Records

- Keep records of your non-deductible contributions to track the basis in your traditional IRA, as this will be important for determining the taxable portion of future distributions.

The provided information chunks do not contain specific details on the calculation of non-deductible IRA contributions or the use of Form 8606. However, the general process outlined above is consistent with IRS guidelines for reporting non-deductible IRA contributions. For the most accurate and up-to-date information, refer to the official IRS instructions for Form 8606, which can be found on the [IRS website](https://www.irs.gov/forms-pubs/about-form-8606).

Remember to consider any changes in tax laws or contribution limits that may affect your IRA contributions and deductions. The IRS regularly updates its publications and forms, so it's important to use the most current version of Form 8606 and its instructions when preparing your tax return.

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Internal Revenue Bulletin: 2023-49 2023-12-03 https://www.irs.gov/irb/2023-49_IRB

Internal Revenue Bulletin: 2023-40 2023-10-01 https://www.irs.gov/irb/2023-40_IRB

Internal Revenue Bulletin: 2012-51 2012-12-16 https://www.irs.gov/irb/2012-51_IRB

Internal Revenue Bulletin: 2006-47 2006-11-19 https://www.irs.gov/irb/2006-47_IRB

Internal Revenue Bulletin: 2003-44 2003-11-02 https://www.irs.gov/irb/2003-44_IRB