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Deductions & credits
The amount she is eligible to contribute to the traditional IRA will not be changed by being covered by the workplace retirement plan, only the amount of the deduction for the contribution will potentially change. Making nondeductible contributions might not be all that unfortunate since the money in the traditional IRA in excess of the basis in nondeductible contributions will eventually become taxable income when distributed and it's possible to find oneself having a higher marginal tax rate in the future compared to the marginal tax rate now.
If modified AGI is low enough to permit a Roth IRA contribution, it probably makes sense to make a Roth IRA contribution rather than a nondeductible traditional IRA contribution.
‎August 27, 2019
6:58 PM