IRA contribution records—keep a copy of all nondeductible contributions
to your IRA permanently to show that you have already paid tax on the money.
The first is a Coverdell Education Savings Account, which allows the taxpayer to make $2,000 annual nondeductible contributions
to the plan.
401(k) plan) for his or her own benefit, and the amount rolled over equals only the sum of deductible contributions and earnings on all contributions (whether earned on deductible or nondeductible portions) but not any nondeductible contributions
, the entire amount roiled over will not be taxed at the time of rollover.
For example, if a taxpayer has an IRA with a value of $100,000 and has made $10,000 of nondeductible contributions
to the IRA, 90% of each distribution will be taxable and 10% will represent a tax-free return of the taxpayer's basis in the IRA.
So if you've maxed out your 401(k) or 403(b) contributions and don't qualify to make Roth IRA contributions because of your income level, you still can make nondeductible contributions
to a traditional IRA in 2009 and 2010 and then convert it to a Roth IRA in 2010.
The IRA/retirement plan consists only of prior tax-deductible contributions and no nondeductible contributions
have ever been made; or
With a Roth IRA, distributions are first deemed paid from the taxpayer's nondeductible contributions
cannot be rolled from an IRA into a qualified plan.
This is tree for both deductible and nondeductible contributions
Your traditional account has been opened for a short period of time and most of the balance consists of nondeductible contributions
The Roth IRA, which was created by the Taxpayer Relief Act of 1997, allows for nondeductible contributions
of up to $2,000 annually.
These include proof of nondeductible contributions
to an IRA, records of home-improvement costs (you'll need these for figuring your capital-gains tax when you sell the house) and previous tax records.