Restrictions on Non-deductible IRAs?
sono...@nospam.com
I will qualify for a Roth IRA contribution this year, but I would still
like to contribute to a non-deductible IRA if I can. All of the
information that I can find tells me I can't deduct any IRA contributions,
but none of it tells me if there are any restrictions on non-deductible
IRAs aside from a maximum contribution of $2000.
On a somewhat related question, I had a non-deductible IRA for several
years before Roth IRAs came along, and then I converted the entire IRA
account into a Roth IRA. If I now go back to contributing to a
non-deductible IRA, when I fill out form 8606, should I put down zero for
the amount of money contributed in prior years to a non-deductible IRA,
since all of that money has now been converted to a Roth IRA?
Thanks for your help!
Phil Marti
>Are there any income restrictions for a non-deductible IRA? I don't think
>I will qualify for a Roth IRA contribution this year, but I would still
>like to contribute to a non-deductible IRA if I can. All of the
>information that I can find tells me I can't deduct any IRA contributions,
>but none of it tells me if there are any restrictions on non-deductible
>IRAs aside from a maximum contribution of $2000.
As long as you are under 70 1/2 and have $2,000 of earned income, you can
contribute to a traditional IRA.
>On a somewhat related question, I had a non-deductible IRA for several
>years before Roth IRAs came along, and then I converted the entire IRA
>account into a Roth IRA. If I now go back to contributing to a
>non-deductible IRA, when I fill out form 8606, should I put down zero for
>the amount of money contributed in prior years to a non-deductible IRA,
>since all of that money has now been converted to a Roth IRA?
Yes. Part I wants to know your basis in the traditional IRA. Since you have
none, report it as zero.
Phil Marti
Topeka, KS
Rich Carreiro
> Are there any income restrictions for a non-deductible IRA?
There is no such thing as a "non-deductible IRA" or a "deductible
IRA." There are only non-deductible *contributions* and
deductible *contributions*.
But in any case, there is no income restriction (other than that
you actually have earned income :-) on your ability to make
a traditional IRA contribution.
> like to contribute to a non-deductible IRA if I can. All of the
> information that I can find tells me I can't deduct any IRA contributions,
What about IRS Publication 590? It states this all quite clearly.
> but none of it tells me if there are any restrictions on non-deductible
> IRAs aside from a maximum contribution of $2000.
There aren't, aside from having earned income and being under
age 70.5.
> On a somewhat related question, I had a non-deductible IRA for several
> years before Roth IRAs came along, and then I converted the entire IRA
> account into a Roth IRA. If I now go back to contributing to a
> non-deductible IRA, when I fill out form 8606, should I put down zero for
> the amount of money contributed in prior years to a non-deductible IRA,
> since all of that money has now been converted to a Roth IRA?
Yes.
--
Rich Carreiro rlc...@animato.arlington.ma.us
D. Stussy
Yes. Prior non-deductible contributions are reduced by the amounts converted.