IRA distributions tax question

IRA distributions tax question
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Years ago (before Roth’s) I made contributions to my IRA but never deducted them because I was so poor I couldn’t use the deductions. Is there any way to avoid paying taxes on distributions from this account?


Welcome to the community, @sunfish8631! Technically, if you didn’t deduct the contributions, you would still owe income taxes on any earnings but the portion of the withdrawal that represents the original contributions should be tax free.

Let’s say you contributed $4,000 and it grows to $10,000. When you withdraw money, 40% of the withdrawal would be tax free and you’d pay income taxes on the other 60%.

I say “technically” because I think a Form 8606 should have been filed each year you contributed but didn’t deduct those contributions. That form keeps track of your tax basis, or the part of your contribution that wouldn’t be taxed. Sometimes those forms aren’t filed, unfortunately. Do you know if you filed them? They might be with your tax documents somewhere…