Hey everyone,
I'm trying to max out my savings and was wondering if I can still ESTABLISH and CONTRIBUTE to a traditional IRA account for 2014 with non tax-deductible dollars (my income is above the limit). Here is my plan:
1. Set up a traditional IRA ASAP and contribute $5,500 with after-tax dollars to the account.
2. At some point in the future, do Roth conversions.
I have a lot of questions on this since I've never set up an IRA before:
1. Is it too late to establish a traditional IRA for the 2014 tax year? My research seems to show that Roths need to be established by Dec. 31, but it appears traditionals can be established right up to Apr 15.
2. How are pre-tax and aftertax dollars kept track of? I'm going to use Fidelity - will they ask me when I deposit the money or do I just keep track myself? Do I just deposit and by not taking the tax deduction, that's enough? I plan for my income to stay above the limit so my entire traditional IRA would be aftertax dollars waiting to be converted to Roth.
3. Can I just deposit any $5,500 I have lying around into the account or does it have to somehow come out of my paycheck or something?
Thank you so much!