While many folks would tell you that it can be a good idea to make non-deductible contributions to your traditional IRA, I believe it’s in the “Bad Idea” category. This is primarily due to the way the tax law works for IRA and non-IRA money.
As you may be aware, distributions from your IRA are generally subject to taxation. Of course, your non-deductible contributions are not taxed, but any growth in your account and any deductible contributions will be taxed at the ordinary income tax rate.
And since non-deductible contributions (typically) make up a small amount of your …Read More