Nondeductible IRA Contributions – Form 8606

For a traditional IRA, you’re allowed to contribute up to a maximum of $5,500. If you’re age 50 or older, the maximum is $6,500.

However, if you’re an active participant in a company plan, your traditional IRA deduction:

  • Begins to phase out when your modified adjusted gross income (AGI) reaches $61,000 — or $98,000 if married filing jointly
  • Is phased out completely when your modified AGI is more than $71,000 — or $118,000 if married filing jointly. So, you can’t deduct your traditional IRA contribution.

You might not be able to deduct your traditional IRA contribution. However, you can make nondeductible IRA contributions. If you make them to a traditional IRA, complete Form 8606 and file it with your return. This form helps you keep track of your basis in the account. Basis includes the total amount of nondeductible contributions that you make. This is important since it’ll keep you from paying tax on the money a second time when you withdraw it.

Related Topics

Related Resources

When Not to File an Amended Return

Don't confuse the IRS and make your situation worse by filing an amended return when you shouldn't. Learn more from the tax experts at H&R Block.

The IRS Phone Scam: Does the IRS Call You?

The IRS phone scam has become one of the most commonly-used fraud tools. Our Tax Professionals list the top three facts to protect you from falling victim.

IRS Letter 4551C – Case Closed

Learn more about IRS letter 4551C, including why it was sent and how to respond with help from the tax experts at H&R Block.

What You Need to Know About an IRS Statutory Notice of Deficiency

The Statutory Notice of Deficiency is part of a series of notices sent by the IRS to propose additional tax, penalties and interest. Learn more from the tax experts at H&R Block.