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Subject:  Can't deduct traditional IRA contribution? Date:  3/8/2021  6:55 PM
Author:  stevenjklein Number:  132204 of 132878

Short version: Is there any good reason to contribute to a traditional IRA if I can't deduct the contribution this year?

Long version:
For about 15 years now, every year when I could afford it, I maxed out my Roth IRA. Until now, I never even knew that contributions to Roth IRAs were disallowed for people earning too much money. My salary isn't anywhere near close enough for that to be an issue.

I was able to max out my Roth contribution in 2020.

But my 2020 investment returns were miraculous, and my H&R Block software told me I'm not allowed to contribute to a Roth IRA.

No problem: It's still before April 15, so I figure I'll just withdraw that money and put it in traditional IRA.

Now my tax software is telling me I'm not allowed to deduct my contribution to a traditional IRA. (In reading the IRS website, I think the reason is a combination of high income + being covered by a 401K at work.)

So, my question is this: If I can't deduct it, is there any reason to contribute at all? Maybe I should just invest it in a non-retirement account?

I suppose this is more of an investing question than a tax question, but either way, I'd appreciate advice.
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