Tag Archives: NonDeductible
The Non-Deductible IRA Trap — and the Fix
HUNT VALLEY, Md. (TheStreet) — If you don’t have any nondeductible IRA assets, this article will not be of interest to you. If you have ever made nondeductible IRA contributions, get ready to be shocked!
Nondeductible IRA assets happen when you are ineligible for an IRA deduction but make an IRA deposit. There is no limitation to make a deductible IRA deposit if you and your spouse (if applicable) don’t have a pension plan at work. If you or your spouse has a pension, there are income limitations to deducting IRA deposits. In addition, every year after you make a nondeductible IRA contribution you must file a form 8606 to disclose your basis in an IRA. Here’s an example:
If you have ever made nondeductible IRA contributions, you should start thinking about the lowest-taxed way to get your money out.
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