Consider a person who wants to contribute $50,000 to his traditional IRA account per year. Now I know there is a limit of $6000 for tax deductible amount you can contribute to an IRA every year. But can the person make a non tax deductible contribution of remaining $44,000 ($50,000 - $6000) contribution to traditional IRA account?

If there is an upper limit for this amount, what is it?


The IRA contribution limit applies to both deductible and non-deductible contributions. If you were to contribute more than that, you'd have to pay a 6% tax every year until the excess and associated earnings are removed.

  • Craig, do you happen to know what this limit is? – adi Jun 8 at 3:57
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    @adi $6000 per year for most people. It is shared between traditional (deductible + non-deductible) and Roth contributions. – Craig W Jun 8 at 4:21
  • I see, Thanks Craig. Just confirming this; is there a separate type of IRA account for non-deductible contributions or the Traditional IRA is the one to which both the deductible and non-deductible ira contributions go to? – adi Jun 8 at 4:24
  • @adi There is only a traditional IRA. It is up to you to keep good records showing your non-deductible contributions which would make future withdrawals partially non-taxable; otherwise the assumption is they are fully taxable. – Craig W Jun 8 at 4:35
  • @adi+Craig: not just keep; you must report nonded trad contributions each year on form 8606 part I, and when you withdraw you use the same form to compute the portion allocated to basis and thus nontaxed. (In contrast you don't report at all contributions to or qualified distributions from Roth.) – dave_thompson_085 Jun 9 at 3:37

You can directly contribute only up to the annual limit, regardless of whether it's tax deductible or not. However you can contribute more under certain circumstances using what's often called a "mega backdoor Roth IRA conversion."

It goes like this: You may be eligible to contribute to a 401k plan through your employer. That plan may offer "after tax" contributions in addition to both "traditional" and "Roth" contributions. That plan may also offer in-plan Roth conversion of your after-tax contributions. Finally, you can roll over that after tax in-plan conversion Roth 401k into a Roth IRA.

Doing this it's theoretically possible to contribute more. In 2021, for example, the maximum 401k contribution from all sources is $58k. Following this mega backdoor strategy could allow you tens of thousands more per year in a Roth IRA.

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