@SLYKTAX wrote:
Thanks. Now I see why anyone would want to put a non-deductible into an IRA with the intent to rollover to Roth for one reason. So there are two different IRA accounts one for non-deductible and another deductible? A If that is the case, are taxes on distributions the same? Is there a limit to the non-deductible contribution?
No. Can be the same account with a mixture of deductible and non -deductible contributions.
The contribution limit is the same for ANY contribution - deductible or non-deductible.
Tax on any distribution is prorated by applying the non-deductible basis between the distribution and years end value of all Traditional, SEP or SIMPLE accounts.
That is done on a 8606 form.
It can be calculated this way.
non-taxable amount = (basis * distribution) / (year end value + distribution)
**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.**
