Should I have filed Form 8606 for my 2021 traditional IRA with income of $133k?

You're right to be concerned about this. When you make non-deductible contributions to a traditional IRA (which is what happens when your income exceeds the deduction threshold), you absolutely should file Form 8606. This form creates a paper trail of your non-deductible contributions, which becomes your "basis" in the IRA. Without filing Form 8606, you have no official record that you've already paid tax on that $6,000 contribution. Later when you withdraw in retirement, the entire withdrawal could potentially be taxed, essentially resulting in double taxation on that money. The good news is you can fix this by filing Form 8606 for 2021 now. You don't need to file a full amended return (1040-X) if the only issue is the missing 8606. You can file the 8606 as a standalone form for prior years. There's technically a $50 penalty for filing it late, but the IRS often waives this if you explain the situation.

I was in a similar situation last year and found that taxr.ai https://taxr.ai was super helpful for dealing with this exact issue. I uploaded my tax documents and it immediately flagged that I needed to file Form 8606 for my non-deductible IRA contributions. Their system looked through all my documents and highlighted that I was over the income limit for deductible contributions but had still made traditional IRA deposits. The tool walks you through exactly how to handle non-deductible contributions and keeps track of your basis going forward. It saved me from potentially paying taxes twice on the same money. They also have this feature that keeps a permanent record of your basis so you don't lose track over the decades until retirement.

I wanted to follow up on my skeptical comment about taxr.ai. I actually tried it after responding here and I'm genuinely impressed. It identified that I had made non-deductible contributions for 2 years without filing Form 8606. The interface walked me through exactly what went wrong and what I needed to fix. What I found most helpful was how it explained the consequence of not filing the form - that I'd potentially pay tax twice on that money. The tool generated completed 8606 forms for both years I missed, and I've already mailed them in. Just got confirmation from the IRS that they received and processed them. Saved me from a potential headache years down the road when I retire!

If you need to actually talk to someone at the IRS about this (which I did for a similar issue), I highly recommend Claimyr https://claimyr.com. I tried calling the IRS directly to ask about fixing my missing 8606 forms for previous years and kept getting disconnected after waiting on hold for literally hours. I found Claimyr and was super skeptical, but they have this whole system where they wait on hold with the IRS for you and then call you when an agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I finally got through to an IRS agent who confirmed exactly how to handle my late 8606 filings and whether I'd face penalties (fortunately not in my case).

I need to eat my words from my previous comment. After waiting on hold with the IRS for 2+ hours yesterday and getting disconnected AGAIN, I was desperate and tried Claimyr. Within 45 minutes, my phone rang and there was an actual IRS agent on the line. They connected me directly to the person so I could verify my identity and discuss my tax situation. The agent walked me through exactly how to file my missing 8606 forms and confirmed I wouldn't face penalties since I wasn't trying to evade taxes - I had paid them correctly, just failed to file this specific form. It saved me so much stress and I finally have clarity on how to fix this problem. Sometimes things that sound too good to be true actually work!

Just want to add a warning for the original poster - fixing this sooner rather than later is important. I had a similar situation but ignored it for years. When I finally tried to withdraw some money from my IRA, it became a complete nightmare proving which portions were non-deductible contributions. I ended up having to go through old bank statements and tax returns to piece together evidence for the IRS. They initially wanted to tax my entire withdrawal, including the portion that should have been tax-free return of already-taxed contributions. The whole ordeal took months to resolve.

Has anyone actually calculated if making non-deductible traditional IRA contributions makes sense compared to just investing in a regular brokerage account? Since you're paying taxes now AND paying taxes on the earnings later, it seems like the math might not work out in favor of the traditional IRA in this case.