Join Our Monthly Newsletter

Stay up to date with our latest news and articles

Should I Have Separate Accounts for My Deductible and Nondeductible IRA Contributions?

December 22, 2015

 

While it is not required to hold separate IRAs for deductible and nondeductible contributions, many financial experts recommend that you do so. The chief reason? Tax planning.


If you "commingle" your funds -- that is, create one account that has a mix of tax-deductible and non-tax-deductible contributions -- it could get tricky for you when it comes time to withdraw those assets or roll them over into a different type of account (such as a Roth IRA).* You'll have to keep good records handy to determine what amount was tax deductible -- or spend a lot of time hunting for old account statements or tax returns. Those tax-deductible contributions, and any earnings, are taxed as ordinary income.


Keep in mind that your eligibility for a full or partial deduction depends on whether you (or your spouse, if applicable) participate in an employer-sponsored retirement plan. If you do, the income limits for a full deduction are $61,000 for single filers and $98,000 for joint filers for 2015.


Source/Disclaimer:
*Distributions prior to age 59½ may be subject to a 10% additional federal tax.


Required Attribution


Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content. 
© 2015 Wealth Management Systems Inc. All rights reserved.

 

Please reload

Recent Posts
Please reload

Every Day Counts

Schedule your Complimentary Discovery Meeting Today

PROUD MEMBER

RIA Stands For You. Registered Investment Advisor In Parker
Proud Member of the Financial Planning Association (FPA) in Parker, Colorado
Proud Member of the International Academy of Colloborative Professionals

© 2019 Oatley & Diak, LLC. All rights reserved.

GET IN TOUCH

  • Facebook Clean
  • LinkedIn Clean