What are deductible vs. nondeductible contributions?
Generally, contributions to a traditional IRA are deductible on your tax return. Deductible contributions can reduce your taxable income and may increase your refund or lower the tax you owe.
In some cases, it can be advantageous not to deduct all or part of a traditional IRA contribution. If you choose not to deduct an amount, enter that nondeductible contribution. Nondeductible contributions do not reduce taxable income and therefore will not increase your refund or lower your taxes owed.
In some cases, it can be advantageous not to deduct all or part of a traditional IRA contribution. If you choose not to deduct an amount, enter that nondeductible contribution. Nondeductible contributions do not reduce taxable income and therefore will not increase your refund or lower your taxes owed.
