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.
An IRS phishing scam is carried out via unsolicited emails or via websites that pose as legitimate companies to obtain tax information & file in your name.
Donating a qualified vehicle to a charity? Learn how Form 1098-C is used to report the details of your donation and how it affects your deduction.
Learn about IRS Notice CP298 and how to address an IRS bill for unpaid taxes. Get help from the tax experts at H&R Block.
Learn more about notice CP297A, your appeal rights, and how to handle an IRS tax bill with help from the tax experts at H&R Block.