So this year you can contribute $11,000 to your 401(k),$3000 to your Roth, and $3,000 to the non-deductible IRA for a total of $17,000.I don't think Uncle Sap will like that!Uncle Slam may not LIKE it, but the IRS says that it is perfectly LEGAL and you will suffer NO tax consequences. The key point is that the contributions to the non-deductible IRA are made with AFTER-TAX dollars, which you can't deduct from your taxable income. But the proceeds from this IRA are tax deferred until distributed, so you get the benefit of compounding on the proceeds (which have not been reduced by any taxation). And after age 59 1/2 you have a nice bundle of money on which the taxes have already been paid (your contributions) and that can be withdrawn without impacting your tax bracket or costing you one additional cent of tax. It is only after you have withdrawn ALL of your contributions and start taking distributions on the earnings that your taxable income is then increased.Be aware that contributions to both of these type of IRA's become restricted or prohibited if your income is above certain levels (something around $90,000 for singles and $160,000 for joint filers).
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