Author Topic: Are some IRA's non-deductible?  (Read 1718 times)

payitoff

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Are some IRA's non-deductible?
« on: May 08, 2014, 03:01:21 PM »
i just did the TD Ameritrade test on which is right for me, with my combined income 140k, married filing jointly and participates in employer 401K, it came back that i am eligible for both Roth IRA and IRA, however, IRA is not a tax deductible.  is there such a thing? if so, what's the benefit of maxing out an IRA after a 401K?

nawhite

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Re: Are some IRA's non-deductible?
« Reply #1 on: May 08, 2014, 03:19:59 PM »
i just did the TD Ameritrade test on which is right for me, with my combined income 140k, married filing jointly and participates in employer 401K, it came back that i am eligible for both Roth IRA and IRA, however, IRA is not a tax deductible.  is there such a thing? if so, what's the benefit of maxing out an IRA after a 401K?

So you just do the Roth IRA because it isn't deductible anyway? Seems like you don't have a problem or I don't understand it.

I'm in the same boat, right at 140k. We max my 401k then my regular IRA wouldn't be eligible for a tax deduction so I do a Roth. My wife doesn't have a 401k available with work so there is a loophole where we can do a traditional and have it be tax deductible.

(Side note, that "non-deductible" traditional IRA is what people use to do "Backdoor Roth" contributions if their income is too high to be eligible for a Roth normally. Create a non-deductible traditional IRA, then roll it over into a Roth. There isn't an income limit on rollovers.)

payitoff

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Re: Are some IRA's non-deductible?
« Reply #2 on: May 08, 2014, 03:34:24 PM »
i just go by the MMM rule to max out all non-taxable accounts before others, just learned this today, good to know, so moving forward looks like we'll only have just one IRA in the household.