How to calculate after-tax portion in my IRA?

Forum|Forum|1 year ago
October 31, 2024
2 replies
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Hi there,

I have a question on how to calculate my after tax portion as my IRA balance changes.

I had a balance of 100k in my IRA (5k after-tax and 95k pre-tax) at the end of 2023. Now the balance is 110k. Should my after-tax portion remains as 5k? Or it should be 5k* (110k/100k) = 5.5k?

Thanks

Best answer by VolvoGirl

It always stays the same. So 5,000.

VolvoGirlAnswer

Employee

It always stays the same. So 5,000.

Opus 17

Employee

Your after-tax contributions are only what you put in after tax, because even on after-tax contributions, the growth is tax-free.

TaxgerAuthor

Thanks @Opus 17 . I guess there's a typo? You mean "even on after-tax contributions, the growth is NOT tax-free. "?

dmertz

Employee

Taxger, you are correct. Opus 17 left out the word 'not' or meant to say that the earnings are taxable.

The after-tax contribution to a traditional IRA was required to have been reported on From 8606, so, properly reported, your basis is the amount on line 14 of the last Form 8606 that you filed.