Non-Deductible IRA Contributions
I have several years of making non-deductible IRA contributions due to my income limit on the deductibility of IRA’s. If I want to move this money into a Roth IRA, do I have to complete it in the same year I make the non-deductible contribution?
I have recorded all my contributions on the 8606 so I keep a tally on my basis from my past deductible contributions.
Thanks,
Glen
Permalink Submitted by Alan - IRA critic on Sun, 2019-04-07 16:42
No, you can convert to a Roth anytime, but all your non Roth IRA accounts are included in determining the taxable portion of your conversion. You cannot convert just the IRA basis (non deductible contribution) amount. Converting your entire TIRA may generate a large tax bill due to taxation of the pre tax amount. However, there is one way around this. If you are working and your current employer plan will accept IRA rollovers, you could roll the pre tax balance of your IRAs into that plan, leaving only your non deductible contribution basis in your TIRA. You could then convert your IRA basis tax free.