A backdoor Roth IRA contribution allows a taxpayer who is over the income threshold to make a non-deductible contribution
to a traditional IRA and immediately convert the money to a Roth IRA.
Also starting in 2002, for taxpayers who qualify, the annual non-deductible contribution
limit to Coverdell Education Savings Accounts increased to $2,000 a year per designated beneficiary, up from the $500 annual limit.
Otherwise, you will be making a non-deductible contribution
to the IRS.
To encourage better funding of defined benefi plans, the Act eliminates the 10% non-deductible contribution
excise tax for said deferrals and matching contributions, up to 6% of total compensation, that are non-deductible as a result of the combined deduction limits.
Specifically, if the individual's (or couple's) participation in a sponsored plan and income level are such that deductible IRA contributions are not possible, but contributions to a Roth IRA would be feasible, the Roth IRA option will virtually always be preferred over a non-deductible contribution
to a traditional IRA.
# of Years Total Value at End of $2K Sum of the of Term at 8% Contributions Contributions Annually 10 $20,000 $28,973 20 $30,000 $54,304 30 $40,000 $91,524 40 $50,000 $146,212 Just as with tax-deductible retirement plan contributions, non-deductible contributions
compound tax-free every year the money remains in your account.
As at any meeting of ISNA, a request is made for contributions to the ISNA-Nurses PAC (Political Action Committee) This year $1,615 was collected in non-deductible contributions
and pledges The meeting ended with the newly elected officers and board members taking the oath of office.
(1) Non-deductible contributions
. What portion of the IRA value reflects non-deductible contributions
In 2010 annual non-deductible contributions
of $2,000 per beneficiary can be made.
If a client owns an IRA with nontaxable non-deductible contributions
, the charitable rollover distribution will come first from the taxable amount (deductible contributions and earnings).
IRA accounts with basis (non-deductible contributions
) and Roth IRA accounts that are distributed in the full amount and have losses are also deductible.