Author Topic: 2013 IRA deductiblity question  (Read 3170 times)

Gone Fishing

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2013 IRA deductiblity question
« on: May 05, 2015, 09:19:55 AM »
Before the deadline, I recharacterized my 2013 IRA contributution from ROTH to traditional and now I am amending my return to get the refund of taxes paid. 

I was slightly into the IRA deductibility phase out range, so I need to calculate the non-deductible contribution amount.  I can not find a chart or calculator to assist with this. 

Can anyone point me in the right direction?


Cheddar Stacker

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MDM

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Re: 2013 IRA deductiblity question
« Reply #2 on: May 05, 2015, 12:04:41 PM »
I was slightly into the IRA deductibility phase out range, so I need to calculate the non-deductible contribution amount.  I can not find a chart or calculator to assist with this. 
The non-deductible amount will equal the amount you contributed minus the amount you were allowed to deduct.

Gone Fishing

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Re: 2013 IRA deductiblity question
« Reply #3 on: May 05, 2015, 12:08:51 PM »
...the amount you were allowed to deduct.

That is what I am trying to figure out...
« Last Edit: May 05, 2015, 12:33:39 PM by So Close »

Cheddar Stacker

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Re: 2013 IRA deductiblity question
« Reply #4 on: May 05, 2015, 12:26:37 PM »
Maybe this will be more helpful. The 8606 is just where the non-deductible portion will end up. I created it in our software with a bunch of fake numbers.

MDM

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Re: 2013 IRA deductiblity question
« Reply #5 on: May 05, 2015, 12:45:44 PM »
...the amount you were allowed to deduct.

That is what I am trying to figure out...
See pp. 32-35 of http://www.irs.gov/pub/irs-prior/i1040--2013.pdf.

Does that give you what you need?

Gone Fishing

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Re: 2013 IRA deductiblity question
« Reply #6 on: May 05, 2015, 01:48:26 PM »
Thanks guys!  That put me on the right track.  I was able to find what I needed here to calculate my deductible amount.

http://www.irs.gov/pub/irs-prior/p590--2013.pdf

It looks like I will also need to file the 8606 for the non-deductible amount which will give me a cost basis on my Traditional IRA. 

So, next question: After I file the 8606,  I will have a basis of $406 on my Traditional IRA that I am assuming will be prorated over my entire TIRA balances everytime I make a withdrawal/conversion for the next 50+- years, which should be mostly in the 0-15% bracket.  Is it even worth the headache/paperwork for the potential for $0-$61 of tax savings ?