What is IRS Form 8606 used for?

IRS Form 8606 is used to report nondeductible contributions to traditional Individual Retirement Accounts (IRAs) and to track the basis of these contributions over time. It is also used to report distributions from traditional IRAs that include both taxable and nontaxable amounts, such as conversions to Roth IRAs. Additionally, Form 8606 helps ensure that taxpayers do not pay taxes again on amounts they have already contributed to their IRAs on a nondeductible basis.