Retirement tax questions


@B-GBPEC wrote:

Thank you for your reply. please let me clerify - Rollover IRA is from previous employeer 401k which is all pre tax where investment into traditional IRA is personal account which has only post tax contribution. 


OK, yes, that makes perfect sense.  You have a traditional IRA at bank 1 that contains pre-tax funds (originally from work), and another traditional IRA at bank 2 that contains non-deductible funds. 

 

At this point, there is nothing special about the IRA at bank 1.  The fact that funds originally came from the employer really has no bearing going forward, it's just an IRA.  You could add new contributions to that account or to a new account, there is no tax benefit to keeping pre- and post-tax funds separate.  Although for your own convenience you can certainly keep them separate.

 

As @dmertz  says, you can contribute up to the $7000 limit of non-deductible funds to any traditional IRA account, you just have to do the bookkeeping on form 8606, including when you withdraw in retirement.  The one thing to remember is that all traditional IRA accounts are combined for tax purposes.