Hello everyone:
I listed information below for reference purpose:
- Residental state: Texas
- Year 2020 Tax Filing status: Married file jointly
- Year 2020 AGI: $139,428
- Turbox Tax showed effective tax rate as: 10.10%
- My contribution to Traditional IRA Account (Vanguard): $4,900
- Nondeductible traditional IRA contributions from worksheet: $4,900 (data from IRA Contribution Worksheet)
- What document(s) I need to file with IRS to notify them that my traditional IRA contribution in year 2020 is after-tax dollar contribution, so they don't tax my again when I withdraw the funds during my retirement years.
- What process I need to go through (such as filing paperwork with IRS or hiring an accountant to do the work for me) in order to claim $4900 is non-taxable with IRA?
- Should I convert $4900 contribution into a Roth IRA account since it is non-taxable?
- If the conversation process is very complicated then I may choose to leave the money in the Traditional IRA account
- Please advise what action shall I take to avoid this situation in the future (e.g. make contribution go to a ROTH IRA account instead of going to a traditional IRA account)?
