Non-deductible Contributions into Traditional IRA’s
Is your income limit too high?
If you are covered by another employer plan such as a 401(k) or 403(b) and your income limit is too high, it may prevent you from making tax-deductible contributions to a Traditional IRA. However, this does not limit you from making non-deductible contributions to a Traditional IRA. You would still have to pay taxes on the money before you put it in, but the earnings on those contributions are tax deferred until you take them out at retirement age.
Who is responsible for filing a form 8606; You or your custodian?
If you do make non-deductible contributions to your Traditional IRA, you are responsible for filing a form 8606. Your IRA custodian does not file this form and is not responsible for informing you about the form. If you fail to file form 8606 for non-deductible contributions, you may be taxed on them again when you take them out as distributions.
Always feel free to ask questions.
If you have questions about non-deductible contributions to a Traditional IRA or questions about the form 8606, please speak with a tax professional.