Q: Is fixing an IRA withdrawal tax slip-up worth it?

Q: I've been taking distributions from my IRA for nine years. It just occurred to me that my taxes have been figured on the entire amount I withdrew. This was a non-deductible IRA, which means I’ve been taxed twice. Is there anything I can do about the past or future taxation? Nina Kauffman, Greenwood, Ind.

A: You would have after-tax contributions in your IRA if you never took a deduction on your income tax return for those contributions when you made them, according to Beverly DeVeny, IRA technical consultant with Ed Slott and Co. in Rockville Centre, N.Y.

“In order for the Internal Revenue Service, the IRS, to know that you have made an after-tax contribution you should have filed Form 8606 with your income tax return for the year you made the contribution,” she says. What’s more, you would also need to file that form in any year in which you take a distribution.

DeVeny says there’s is a formula on the form for determining what part of your distribution would be taxable and what part would be tax-free.

But don’t despair if you’ve never filed this form. “All is not lost,” says DeVeny.

The IRS tells you in Form 8606 how to prove that you have after-tax funds in your IRA. “Once you have your backup then you could file amended returns for the last three years to claim a refund,” says DeVeny. Or, if you don’t want to go through the hassle of amending three years of returns, you could simply use up your after-tax contributions going forward.

A word to the wise, though, is in order. “Going back, however, opens those returns up to three more years of scrutiny, so it may not be worth it,” says DeVeny’s colleague, Jeffrey Levine, a certified public accountant and IRA technical consultant with Ed Slott and Co.

Robert Powell is editor of Retirement Weekly, contributes regularly to Paste BN, The Wall Street Journal and MarketWatch. Got questions about money? Email rpowell@allthingsretirement.com .