Sentences with phrase «make nondeductible contributions»

It's possible to make nondeductible contributions to a Traditional IRA, also called «after - tax contributions».

These accounts work much like Roth IRAs, allowing you to make nondeductible contributions, build up investment earnings inside the account, and eventually withdraw the money, including earnings, without paying any tax if the money is used for college expenses.

Even if you're not eligible to deduct your traditional IRA contribution, you can make nondeductible contributions and still benefit from tax - deferred investment growth.

It's possible to make nondeductible contributions to a Traditional IRA, also called «after - tax contributions».

If you made nondeductible contributions to your IRA, you must calculate your RMD based on the total balance, but your taxable income may be reduced proportionately for the after - tax contributions.

A Roth IRA allows you to receive tax - free distributions of your retirement funds in return for making nondeductible contributions now.

Once you make a nondeductible contribution to a Traditional IRA or rollover after - tax amounts, any distributions taken from the IRA will include a prorated amount of pre-tax and post-tax assets.

You may have a conversion that's only partly taxable because you made nondeductible contributions to a traditional IRA before the conversion.

If your income is very high, you might not be able to deduct the Traditional IRA contribution (wholly, or in part) on your 2016 tax return either, and if you are in that high - earner category, you should file Form 8606 with your tax return to tell the IRS that you have made a nondeductible contribution to your Traditional IRA.

If you made nondeductible contributions to a traditional IRA at any time in the past, and haven't previously withdrawn the nondeductible contributions, then your partial conversion will be partly nontaxable.

If you've made nondeductible contributions to one or more regular IRAs, then the conversion will be at least partly nontaxable.

Q: How do I determine how much of my distribution is nontaxable if I made nondeductible contributions to one or more of my traditional IRAs?

If you made nondeductible contributions to your IRA, you must calculate your RMD based on the total balance, but your taxable income may be reduced proportionately for the after - tax contributions.

If you also made nondeductible contributions to your IRAs, some of the amount won't be subject to income taxes.

What if you never made a nondeductible contribution to your Traditional IRA, or you made some nondeductible contributions many years ago and have forgotten about them?

Once you make a nondeductible contribution or roll over after - tax amounts to any of your Traditional, SEP or SIMPLE IRA, any subsequent distributions from any of your Traditional, SEP or SIMPLE IRAs will include a prorated amount of pretax and post-tax assets, as these IRAs are aggregated for the purposes of determining the taxable amount of any distributions.

Once you make a nondeductible contribution or roll over after - tax amounts to any of your Traditional, SEP or SIMPLE IRA

If that is the case, you can still consider making nondeductible contributions to a traditional IRA.

Not exact matches

Contributions are deductible, unless you are covered under an employer - retirement - plan and your income exceeds certain limits, but anyone can make a nondeductible IRA contribution.

The need to save for a secure tomorrow, combined with the power of tax - deferred earnings, makes nondeductible IRA contributions a promising alternative for individuals no longer eligible for deductible IRA contributions.

Because the aggregation rule makes the taxable distribution the same no matter which account you convert, you can't reduce the taxable distribution amount by converting an IRA with a larger proportion of nondeductible contributions.

If you exceed the income limits, you can still make the maximum annual contribution, but a portion or all of it will be considered a nondeductible contribution.

A: If you convert the entire amount of all traditional IRAs you own, then the non-taxable part of your rollover distribution is simply the total amount of nondeductible contributions you made to all of those IRAs, less the amount of nontaxable distributions you received in the past.

Let's say that, over the years, you have made $ 20,000 in nondeductible contributions to an IRA that is now worth $ 30,000.

You must file Form 8606 for any tax year you made a nondeductible IRA contribution.

The A in IRA stands for Arrangement, not Account as most everybody thinks, and your Traditional IRA can invest in many different things, stocks, bonds, mutual funds, etc with different custodians if you choose, but your basis is in the IRA, not the specific investment that you made with your nondeductible contribution.

Keep a record of all nondeductible IRA contributions — and make sure your heirs know where to find the details.

Nondeductible contributions up to $ 2,000.00 may be made to each child's account annually.

«If you make your contribution to the nondeductible traditional IRA and then leave it there until it accumulates sufficient investment income to exceed the full contribution amount before you convert it, you will have to reverse the excess amount of the conversion before the end of the year or face a fine from the Internal Revenue Service.