Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.