That is a very good question to ask. Though all water essentially looks the same, all water is not created equal. You need to be clear (pardon the pun) on what chemicals and minerals might be present in your drinking water before using it to make formula for your baby.
Concerns Regarding Fluoride and Baby Formula
The American Dental Association (ADA) has issued concerns about using water that contains heavy concentrations of fluoride. While fluoride is often thought of as a good thing, higher levels can cause enamel fluorosis. This is not a tooth disease, but rather causes cosmetic imperfections on the teeth. You will see it as white spots or streaks on the enamel. This imperfection of coloration actually develops on your baby's permanent teeth while they are still forming in the gums.
The ADA recommends that if you are using fluoridated water that you check with your local water company to make sure that the fluoride level is less than 0.7 mg/L. If you are mostly breastfeeding and only using an occasional bottle that may have a slightly higher concentration, talk with your pediatrician about whether this limited exposure might be acceptable.
In addition to the medical community, for various reasons some people oppose using fluoridated water at any age. So how do you find out if your drinking water is fluoridated, and if so, how much? Use this Fluoride Finder Tool to learn more. If you are worried about the fluoride levels in your area, there are ways to remove fluoride from drinking water.
Using Well Water for Infant Formula
If your home is supplied by well water rather than by a public water system, it is a good idea to have your water tested to make sure it is safe for your baby. Simply boiling your well water and assuming it will be safe, really is not a good idea. For example, well water may contain minerals (like iron or nitrates), that cannot be boiled off. Boiling water may only cause the concentration to become higher rather than purifying the water.
For more information read: Safe Drinking Water: Making Tap Water Drinkable
Using Bottled Water to Make Formula
So if you are in a situation where you do not want to use water from the tap, whether you are at home or out-and-about in public, the other option is to buy purchased bottled water. One option is to buy "Nursery Water," water marketed specifically for babies. However, you could also look for low-fluoride bottled water that is labeled as being purified, deionized, demineralized, distilled, or prepared by reverse osmosis. Any water you buy in the United States by law must meet the FDA's standards of water quality.
When to Boil Water
At one time, packaging made it clear that all water used in infant formula preparation should be boiled. However, today if you were to read your package of infant formula, most likely it will make a statement that you should ask your doctor about whether or not you should boil the water before preparing formula for your baby. While the American Academy of Pediatrics (AAP) does not have a formal policy on the topic, the World Health Organization (WHO) Guidelines for Preparing Formula, states that ALL water (whether from the tap or bottled and purified) should be boiled before use. I'd run your plans for making formula by your doctor, and find out what he or she believes to be necessary for your situation.