are rollover contributions deductible
The amount that can be deducted from your tax return depends on your filing status and coverage by a retirement plan at work. The amount which falls outside the deductible range on your tax return is the non-deductible IRA contribution. But as the IRS also says in its discussion of rollovers, “To the extent the distribution is rolled over into a traditional IRA, it is not includible in your income.” Thus, although the rollover is not eligible for a tax deduction, it is not taxable, either. A rollover contribution may originate from the following: 1  A distribution from the same Traditional IRA, another Traditional IRA, an SEP IRA or a SIMPLE IRA that meets the two-year requirements. Rollover contributions must be made within 60 days after the IRA holder receives the distributed assets. For example, if 5% of your non-Roth IRA are non-deductible contributions, then 5% of the conversion amount must be non-deductible contributions, and the rest must come from the deductible contributions, including earnings and rollover contributions. IRA to 401(k) rollover tax deduction. In 2016, I contributed $5500 to a Traditional IRA for the first time and then realized it wouldn't be tax deductible. My 401(k) accepts IRA rollover contributions. An individual may make rollover contributions to his or her Traditional IRA. A rollover is a tax-free movement of assets between retirement plans, but unlike a transfer, the transaction is reportable: the distribution is reported to the IRS and the IRA owner on IRS Form 1099-R, and the contribution on IRS Form 5498. Rollover IRAs are for individuals who want to move their retirement savings out of a fund without incurring early-withdrawal penalties or paying income taxes. The IRS allows the money to be rolled into a traditional IRA from other IRAs, from an employer’s qualified retirement program and from 457b and 403b plans. Rollovers are not tax deductible. Traditional IRA rollovers are helpful for combining different retirement accounts into one for better money management. When you got a distribution check from the IRA, then reinvested it in your 401k, you executed an indirect rollover. Rollovers from an IRA to a 401k are allowed by the IRS if the plan permits it. If you rolled the money into your 401k within 60 days, the amount should be tax-deductible. A rollover contribution may originate from the following: 1  A distribution from the same Traditional IRA, another Traditional IRA, an SEP IRA or a SIMPLE IRA that meets the two-year requirements. 2  A direct rollover or indirect rollover from a qualified plan, 403(b) plan or a governmental 457(b) plan. Example: Mr Gibbs has a non-deductible traditional IRA that has a value of $30,000 and a $12,000 basis of after tax contributions. He also has a traditional IRA valued at $210,000 consisting of a rollover from a QRP plus some deductible IRA contributions.
Yes, deductible contributions, including rollover contributions.