My employer doesn’t allow pre-tax deductions for adding money to my traditional IRA. If I add money to my IRA post-tax from my paycheck, wouldn’t I be taxed twice overall (time I was paid from my employer and then when I take it out of the IRA when I retire)? Or does the tax break of 6K even this out? Am I just overthinking?
If you contribute to just the traditional IRA with your post-tax salary, the amount you contributed can be used to claim tax reduction on your year-end tax returns. If you do so, that means you wouldn’t have paid taxes on the contribution into IRA, so it would be taxed when you withdraw it later in the future.
IRAs are generally individual accounts not associated with an employer, unless this is a SIMPLE IRA and you work for a small business? If so, is your employer offering the “Roth” version? What you described doesn’t QUITE make sense to me. Do you have an HR person at work who helps with this kind of stuff?
Only if you deduct part or total contribution on your income tax. If you do, you’ll have to pay tax on the amount you were able to deduct. Let’s say you add 6K to your traditional IRA but did not qualify for deduction due to your income been more than the max allowance for deduction, you’ll only pay taxes on profit when you withdraw . So if your 6K became 9k, you’ll pay tax on 3K only. There is a table to calculate deduction.