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I am in my early 30s and I have recently rolled over my 401(k) fund from my former employer into a Traditional IRA account. All the money in this account is pre-tax income.

I would like to contribute to this IRA account, but have few questions regards to this contributions:

  1. If I contribute to this IRA account, isn't the newly contributed amount get mixed up with my rolled over pre-tax 401k money with after-tax contributions (via bank deposit)?
  2. If this traditional IRA account allows me to deposit pre-tax income, how can I do that? Should I request my employer to deposit some 5% pre-tax money into this account? (might not be, as employer sponsored would be 401(k))
  3. I understand what ROTH account is and how it works(we contribute after-tax income). But how we can differentiate traditional IRA with ROTH IRA, as it looks like, contributing would come from our after-tax income for both types?

I am puzzled with this, as no source has answers for all of these questions. Any insights would be really helpful.

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  1. Yes, it gets mixed up. That's ok; there's no harm. (I like to keep my 401(k) rollovers in separate Traditional IRA accounts, just... because. Maybe because it makes easier the ability to watch each old 401(k) grow.
  2. Just deposit it. As LunarGuardian mentioned, deduct it from your income when filing your taxes.
  3. At brokerages and banks, Roth and Traditional IRA money are stored in different accounts that are explicitly labeled. When you go to open an account, the bank or brokerage will prompt you as to what kind of account to open. Here, for example, is how Fidelity does it when you click on "OPEN AN ACCOUNT". (Every brokerage does something similar, so don't take this as an endorsement of Fidelity.)

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  • +1 - My only addition, not worthy of full answer, is to tell OP that Trad 401(k) (rolled to IRA) and Trad IRA are identical, tax wise. Even if kept in seperate accts (no issue that you do this), at withdrawal time, all accts are aggregated for tax purposes. Even if post-tax deposits are made, the IRAs are consider "one arrangement" for taxes. – JTP - Apologise to Monica Nov 1 at 11:47
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When you contribute to a traditional IRA, you deduct those funds from your income on your tax return for that year to make it pre-tax again.

  • Note IRA contribution limit is currently $6,000 per year (plus $1,000 if 50+), much less than the max for 401(k) or other qual plan although not too far from most match limits. If you are covered by an employer plan and have more than moderate income, your spouse is covered and you file joint with fairly high income, or either is covered and you file separate, you lose the deduction; you can still contribute post-tax, track basis on form 8606 and get that part of your trad IRA back without tax in the future, but it's usually better to go Roth (maybe backdoor). See pub 590a&b. – dave_thompson_085 Nov 1 at 7:29

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