Max'd Roth IRA contributions & 401k. Can I contribute to non-deductible IRA, too?

Question

I contributed the max $15,000 to my company 401K. With an adjusted AGI $102,880 for Single taxpayer, the IRS spreadsheet indicates a maximum ROTH IRA contribution of $1900 is allowed.

My question is whether a non-deductible contribution to traditional IRA in the amonut of $2100 is allowed. This keeps IRA contributions to $4000... is this allowed?

thanks,

Chaz

Answer 1

Better check with a " real" tax guy...I'm thinking $ 4000. in the Traditional would bring your Adj Gross down...yes? ..no?
....and the ROTH ( seeing as you are paying tax on THAT money) should be able to take another $ 4000. (max).
One thing about our gov geniouses...they sure make things " easy" on someone who's trying to " take care of themselves" instead of counting on them ( and their broken down " we'll take care of you" Social Security system!)

Answer 2

There's no income limit for contributing to a traditional IRA and the max total contribution to all IRAs is $4000, so if you put $1900 in the Roth, then you can put $2100 in the traditional IRA. You won't get a tax deduction for it, but you won't be taxed on it twice. You will file a form 8606 for the $2100. That's the way the IRS keeps track of what money you contributed after tax to the traditional IRA. When you cash it out during retirement, you do not have to pay tax on the portion that is your contribution.

Answer 3

You can contribute any amount of wages you want to an IRA. You do not get the tax deferral. You may end up paying double taxes on IRA withdrawals, at a later date.
Add after-tax dollars to an IRA, and you will eventually have to pay taxes on the amount of the withdrawal.
You can invest in municipal bonds to avoid tax altogether. You can buy tax deferred annuities, to avoid paying tax on earnings until the earnings are withdrawn.