topic Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes? in Get your taxes done using TurboTax

Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes?

rhodesjulian-out — Tue, 10 Mar 2026 07:21:41 GMT

The money i put into this ira is post tax money. So it is already taxed, will i owe taxes on it again or no

Re: Hello, . I just put money out of my check each week into it. Would i owe taxes?

Mike9241 — Thu, 15 Dec 2022 05:41:12 GMT

your statements seem to be contradictory so please clarify exactly what you did

i made a rollover ira account thinking i would roll money into it from a 401k never did it

The money i put into this ira is post tax money.

Re: Hello, . I just put money out of my check each week into it. Would i owe taxes?

fanfare — Thu, 15 Dec 2022 05:54:11 GMT

You don't pay tax on money contributed to an IRA.

You will pay a yearly penalty if you make a contribution for which you are not eligible.

@rhodesjulian-out

Re: Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes?

dmertz — Thu, 15 Dec 2022 16:14:02 GMT

Your deposits constitute regular IRA contributions that must be reported on your tax return either as deductible contributions (with the deduction effectively converting the contributions into pre-tax money) on Schedule 1 line 20 or on Form 8606 as nondeductible (after-tax) contributions. If you have basis in nondeductible traditional IRA contributions, subsequent distributions will consist of a proportionate mix of nontaxable (after-tax) money and taxable (pre-tax money). If you have not reported on Form 8606 any nondeductible contributions, any distribution from your traditional IRAs will be entirely taxable.

Re: Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes?

rhodesjulian-out — Thu, 15 Dec 2022 20:44:32 GMT

All the money i have put into this rollover ira has been post tax money. Its already been taxed coming out of my pay check.

Re: Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes?

dmertz — Thu, 15 Dec 2022 22:48:11 GMT

As I said, it becomes pre-tax money by virtue of the tax deduction that you receive for the contributions. If you instead report the contributions on Form 8606 as nondeductible contributions, only then does it become after tax money in your traditional IRAs.

Re: Hello, i made a rollover ira account thinking i would roll money into it from a 401k never did it. I just put money out of my check each week into it. Would i owe taxes?

Opus 17 — Fri, 16 Dec 2022 01:32:00 GMT

@rhodesjulian-out wrote:

All the money i have put into this rollover ira has been post tax money. Its already been taxed coming out of my pay check.

That's every IRA ever. IRAs are different from 401k plans, in that a 401k plan is sponsored by the employer and you can only contribute via payroll deduction. However, an IRA is a private retirement arrangement made with a bank or broker. You contribute money (up to $6000 per year, or $7000 if age 50 or older) and then you have the choice to make those contributions tax-deductible.

That's the whole point of an IRA, you make tax deductible contributions while you are working, and then when you retire and are presumably at a lower tax bracket, you withdraw the money and pay the taxes. You report the contributions on your tax return and they are subtracted from your taxable income, so they become tax-free. Tax-free now, taxable on withdrawal.

The other option, if your income allows it, is to contribute to a Roth IRA, which means you pay the taxes now (no deduction) but withdrawals after you retire are tax-free. (If you intended to make after-tax contributions to a Roth IRA -- which is often a very good idea -- we can tell you how to correct the problem but it is best to do it before December 31.)

If you are making contributions to a traditional pre-tax IRA but you don't want to deduct them, that is a third situation which is much more complex and not recommended if you can avoid it. We can discuss that with you if you like, but I feel you need to get up to speed on the basics of IRAs first. If you don't want to talk to a financial advisor, there are some good books and good web sites on retirement investing (if you can avoid the scammy ones).