@VAer wrote:
I opened a traditional IRA last year, and just realized that my contribution is not deductible (Turbotax website).
Fortunately, I did not contribute much on traditional IRA, instead I contributed most on Roth IRA.
Regarding no deduction on traditional IRA when income surpasses $75k: is it the new policy or has it been there for a long time? I mistakenly thought traditional IRA contribution is before tax money and already deductible.
If it is not deductible now, do I need to pay tax when withdrawing money after retirement?
Thanks.
Deduction limits when covered by a retirement plan at work have been there forever.
The non-deductible part will be prorated when a distribution is make. A 8606 form should be part of your tax return. Retain it because you will need the box 14 amount if you make another nondeductible contribution in the future or take a distribution.
https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-l...
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
