@nblandfo wrote:
Thanks for the reply.
So If I do not file a form 8606 and make these contributions deductible (how I've filed 2018-2020), won't I be double taxed once I withdraw since I am making these contributions post-tax? Or is that where the tax-break applies (IRA deduction, form 1040 line 19 under Adjustments to Income)?
Correct. If you do not report and track your non-deductible contributions on form 8606, then all your withdrawals will be taxed, which results in double-taxation because a portion of your contributions were already taxed.
If you report your non-deductible contributions, you will have a "basis" in your IRA, and a proportional share of future withdrawals will be non-taxable. But for various reasons, it is better to make non-deductible contributions to a separate Roth IRA, if you are eligible.
