Non-Deductible IRA / IRA Roth Conversion

[cippy1025]

I want to contribute $7000 for a Non-Deductible IRA for the 2021 Tax Year right now ( and convert it to a backdoor Roth IRA right now). No existing IRA accounts. However, there is a chance that my eventual income for 2021 may allow for a partial deductible IRA. I want to be able to ignore that partial deductible IRA piece that during my 2021 tax return and just stay with the $7,000 non-deductible IRA(that i will have converted to a Roth IRA during the Year). Is there a way to go with my preferred option during the 2021 Tax filing or will I be forced to use the partial deductible IRA. I use Turbo Tax. Thanks in advance.  

[ThomasM125 · Accepted solution]

You can treat the IRA contribution as non-deductible even if you are eligible to make part or all of it deductible. 

[devlinsje]

Thomas, is there a simple formula we can use to calculate the tax if there are other IRAs in existence with pre tax and non deductible contributions?

[ThomasM125]

The federal tax rates are graduated, so a married filing joint taxpayer would pay federal tax in at 12% for income up to $80,250, 22% for that amount up to $171,050, 24% for the next bracket up to income of $326,600, 32% up to $414,700, 35% up to $622,050 and 37% over that amount.

So you can multiply the applicable percentage times your contribution or distribution to see what the federal tax impact is.

[wallj2015]

I have been tracking a non-deductible traditional IRA deduction made years ago.  This IRA was subsequently converted to a roth IRA.   Do I need to continue to track and report on my tax returns.

[macuser_22]

Did you have ANY Traditional, SEP or SIMPLE IRA after Dec. 31, 2020?

Look at the 2020 8606 form, is anything on line 14?