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L
Llctaxlearner
April 19, 2022
Question

Ira contribution which I could NOT deduct

  • April 19, 2022
  • 1 reply
  • 0 views

For 2021 , due to total AGI I could not deduct my 6k ira contribution 

 

since I already made contribution and now since it’s post taxes , would I have to pay taxes when in future I take distribution ?

 

 

    1 reply

    E
    ErnieS0
    April 19, 2022

    You do not pay tax on any contributions that you could not deduct. You will pay tax on any earning.

     

    For example, if you contributed $6,000 in after tax money to your IRA and it grows to $10,000 when you decided to withdraw it, then only $4,000 will be taxable ($10,000-$6,000).

     

    TurboTax will keep track of this after tax basis.

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    L
    LlctaxlearnerAuthor
    April 20, 2022

    Since it was not deductible eligible I didn’t report , how do I correct it ?

     

    plus several years dow the road when I do withdraw , how would Irs know only 4000 assuming gain is only taxable ?

    S
    SundayInSalem
    May 19, 2022

    Report your nondeductible IRA contribution on Form 8606 so you and IRS have a record that you made a nondeductible contribution.

     

    TurboTax will create Form 8606 if you enter a nondeductible contribution. You can amend your return.

    How do I amend my 2021 return?

     

    When you do withdraw from an IRA several years down the road, Form 8606 will be your proof that you made a nondeductible contribution.

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