Form 8606 Roth IRA Basis Tracker
Form 8606 tracks non-deductible IRA basis — critical for backdoor Roth conversions. Failure to file Form 8606 means tracking is lost and the conversion is double-taxed. This calculator reconstructs basis from contribution history and computes pro-rata conversion tax.
Why Form 8606 Matters
Non-deductible IRA contributions create after-tax basis. Without Form 8606 filing each year, the IRS treats all IRA distributions as fully taxable. Reconstructing basis years later requires evidence (1040s + canceled checks). Filing 8606 annually is the only safe way.
The Pro-Rata Rule
All your traditional, SEP, and SIMPLE IRAs are treated as one giant IRA for distribution tax purposes. Basis is allocated pro-rata. You cannot 'cherry-pick' the after-tax basis for conversion. The denominator is December 31 balance of ALL non-Roth IRAs.
Backdoor Roth Cleanup Move
Standard fix for pro-rata friction: rollover the pre-tax traditional IRA balance into your current 401(k) (employer plans are NOT counted in pro-rata calculation). This leaves only the non-deductible basis in the traditional IRA — making the backdoor Roth conversion tax-free.
Form 8606 Filing — Step-by-Step for the 2026 Tax Year
The IRS Form 8606 (2026) has three parts; backdoor Roth filers complete Parts I and II. Part I reports non-deductible contributions: enter your 2026 non-deductible contribution on line 1 (max $7,000 under age 50, $8,000 if age 50+, both unchanged from 2025), prior-year basis on line 2, sum on line 3. Lines 4-6 handle distributions; line 14 is your new total basis to carry forward. Part II reports the Roth conversion: line 16 = conversion amount, line 17 = basis applied via pro-rata, line 18 = taxable amount (flows to Form 1040 line 4b). Common mistake: leaving line 14 blank in subsequent years — the IRS treats omitted basis as $0 and double-taxes the next conversion. Always retain a copy of every year's 8606 with your basis worksheet. The IRS imposes a $50 penalty per missing year per IRC §6693(b)(2), but the bigger cost is reconstructing basis from 10+ years of canceled checks and brokerage statements. File 8606 every year you have basis, even with no contribution or conversion in that year.
Sources: IRS Form 8606 Instructions (2026); IRC §408(d)(1)-(2) Pro-Rata Rule; IRC §6693(b)(2) Penalty. Last updated: 2026-06-23.