Traditional IRA and Mega Backdoor IRA contribution deductible

[yatoshura]

Are my Traditional IRA and Mega Backdoor IRA contributions supposed to be deducible? I contributed over 40K total for 2025, but none of that amount was deducted in my 2025 tax return. Why is that?

[baldietax]

"mega backdoor IRA contribution" - can you clarify what you are doing.  Generally the term "mega backdoor ..." refers to a rollover of after-tax money from a 401k to a Roth IRA, that would just show up as a non-taxable distribution on your return

Traditional IRA contributions are deductible if you are eligible based on your MAGI and compensation level, when you enter the contribution under Deductions and Credits you will get questions and dialog about whether it's eligible and ability to elect as non-deductible.  if you're not eligible for deductible contribution it will show up as a non-deductible contribution on Form 8606 Line 1.

[yatoshura]

My 401K account let me do an in-plan conversion I can contribute more (over 35K) into my account with after tax dollars. Is this the mega backdoor IRA (my W-2 box 14 have this amount as AFTAX) ? Is this the same as contributing to Roth IRA?

This is separate from the 7K I contributed to my traditional IRA account.

[DawnC]

It is Roth-like, but with higher limits.   The AFTAX is after-tax.   The Mega part happens when you take those after-tax dollars and move them into the after-tax side of your 401k (an in-plan conversion) or into a Roth IRA.    You will get a 1099-R that reports non-taxable income for the mega-rollover (conversion).  

For the $7,000 Standard Backdoor to be tax-free, you must have $0 in total Traditional IRA balances across all accounts as of December 31, 2025.

Show the basis; the 7k should be marked as non-deductible on Part 1 of Form 8606 and Part 2 will show the conversion.   How do I enter a standard backdoor Roth IRA conversion?