Is there any downside in converting a traditional IRA account to a Roth IRA, if the contributions to the traditional IRA cannot be deducted?
Let's assume that the traditional IRA account hasn't made any earning yet (e.g., one has just contributed the IRS yearly limit to it, which is 5.5k USD in 2017), since any earning on the traditional IRA account would be taxed when converting the traditional IRA account to a Roth IRA.
From what I can see:
- 2017 IRA Deduction Limits - Effect of Modified AGI on Deduction if You Are Covered by a Retirement Plan at Work (mirror) indicates that if one earns more than some amount (72k USD in 2017 when filing as single or head of household), the contributions to the traditional IRA cannot be deducted.
- Traditional and Roth IRAs (mirror) indicates that qualified withdrawals from Roth IRA are not taxed (e.g.,), unlike qualified withdrawals from a traditional IRA.
Did I miss something? i.e. should one always convert a traditional IRA account to a Roth IRA, if the contributions to the traditional IRA cannot be deducted due to high earnings?