The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: To IRA or not to IRA||Date: 2/10/2001 3:56 PM|
|Author: irasmilo||Number: 46135 of 120438|
...Now what do I do with the $1000 that I already sent my IRA broker this year towards last year's contribution ? Should I take it back? The stock that money bought has fallen in value since I put it in, so withdrawing would set me back by about $200 and also how does one compute the withdrawal amount?
I'm going to pass on this question.
If suppose I dont withdraw it, I understand it would be called a non-deductible contribution. Can I mix deductibe and non-deductible contributions in the same IRA account ? How does one calculate the tax when the money is finally withdraw at age 59 1/2?
Yes, you can mix deductible and non-deductible contributions in the same IRA. You keep track of the non-deductible contributions on Form 8606 which you will have to file this year. When you finally get around to withdrawing funds from the IRA there is a formula you use to determine how much of the withdrawal is taxable and how much is tax-free (non-deductible contribution). This can be found on Form 8606 as well.
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