A non-deductible IRA is a retirement savings account to which you contribute money after taxes, but which allows you to increase your retirement money tax-free until the profits are withdrawn. Any money that contributes to a traditional IRA and that you don't deduct on your tax return is a “non-deductible contribution.” You must still declare these contributions on your return, and to do so, you must use Form 8606. A non-deductible IRA is a type of retirement account, similar to a traditional IRA or a Roth IRA. What sets non-deductible IRAs apart is that account contributions don't provide an immediate tax benefit because they're made with after-tax money. There are several reasons why an investor may choose to fund a non-deductible IRA, such as investing in gold for IRA investment. Deferring taxes on investment profits is an advantage, no doubt about it.
However, it's best to make those profits tax-free, and if you overcome some obstacles, you can do that with the help of a non-deductible IRA.
