Form 8606: Tracking Nondeductible IRA Money
Published November 4, 2026
Form 8606, Nondeductible IRAs, is the form that tracks money you already paid tax on in a traditional IRA. That tracked amount is called your basis. Without the form, the IRS has no record of it, and you could pay tax on the same money twice. IRS: About Form 8606
What Form 8606 reports
Form 8606 reports four kinds of activity:
- Nondeductible contributions you made to traditional IRAs
- Distributions from traditional, SEP, or SIMPLE IRAs, if you have ever made nondeductible contributions
- Conversions from traditional, SEP, or SIMPLE IRAs to Roth IRAs
- Distributions from Roth IRAs
Deductible or not
A contribution to a traditional IRA is not always deductible. Whether it is depends on your income and on whether you or your spouse are covered by a retirement plan at work. A contribution you do not deduct is a nondeductible contribution. That is the money that goes on Form 8606. IRS: 2025 Instructions for Form 8606
Employer contributions to a SEP or SIMPLE IRA are not counted as nondeductible contributions. IRS: 2025 Instructions for Form 8606
Who must file
You generally must file Form 8606 if any of these apply for the year:
- You made a nondeductible contribution to a traditional IRA.
- You took a distribution from a traditional IRA, and your basis in those IRAs is more than zero.
- You converted money from a traditional, SEP, or SIMPLE IRA to a Roth IRA.
- You took a distribution from a Roth IRA.
The instructions list other cases and special rules, so read them for your year. IRS: 2025 Instructions for Form 8606
Roth conversions
When you convert traditional IRA money to a Roth IRA, the form shows how much of the converted amount is basis and how much is taxable. The part that is not basis is generally taxable in the year of the conversion. IRS: About Form 8606
Roth IRA withdrawals
Contributions to a Roth IRA are not deductible. Qualified distributions are not included in income. Form 8606 helps track the parts that are not taxed. IRS: Topic no. 309, Roth IRA contributions
Keep a running record
Basis carries forward from year to year. Each year's Form 8606 builds on the last one. Keep a copy of every filed form, and keep the statements from your IRA custodian for each contribution and withdrawal. IRS: Publication 590-B, Distributions from Individual Retirement Arrangements
Why this matters later
When you take money out of a traditional IRA in retirement, the form helps split the withdrawal into basis, which is not taxed again, and earnings, which may be taxed. Without a record, you may need to rebuild years of statements.
Keep the forms with your tax records for as long as the IRA or its basis matters. Publication 590-B explains how withdrawals are taxed.
Common mistakes
A frequent error is to skip Form 8606 because no tax was due. The form can still be required, since it tracks basis that is not taxed again. Another error is to count an employer SEP or SIMPLE contribution as nondeductible. Check each contribution type before you enter it on the form.
Also keep the amounts in dollars, not estimates. The form asks for exact figures from your IRA statements.
Steps to take
- List your nondeductible traditional IRA contributions by year.
- Check whether you took any traditional IRA withdrawals or Roth IRA withdrawals in 2025.
- Check whether you converted money to a Roth IRA in 2025.
- Complete Form 8606 and attach it to your return.
- Keep the form with your IRA records for future years.
Basis tracking can get complicated after a conversion or a rollover. Publication 590-B and the form instructions have worksheets for those cases.
General information, not advice about your return.
Sources: Sources: IRS, About Form 8606 (https://www.irs.gov/forms-pubs/about-form-8606); IRS 2025 Instructions for Form 8606 (https://www.irs.gov/pub/irs-pdf/i8606.pdf); IRS Topic no. 309, Roth IRA contributions (https://www.irs.gov/taxtopics/tc309); IRS Publication 590-B (https://www.irs.gov/forms-pubs/about-publication-590-b) This is general information, not advice about your specific return.
