Users want more detailed guidance on how to contribute to a Roth IRA when income is too high, particularly regarding the pro-rata rule and alternatives to traditional IRAs.
Hi, I have a question regarding Roth Ira/Traditional Ira. My wife and I filed taxes, jointly and our combined income is too high to take Traditional Ira deduction. We both have Roth Ira that we contributed up until 2025. For 2025, our accountant told us our only option is to open a Traditional Ira and put $7000 each. We did that but now I am wondering: 1. After researching, I learned about pro rata rule and honestly if we cannot deduct Traditional Ira contribution, is it worth having it? Is it better just investing in regular brokerage because we are both buy and hold type of investors and that means that one day in retirement if we decide to sell any shares we will be taxed at long term capital gains rate vs ordinary income rate on our earnings portion of IRA. Also no RMD’s rules 2. I kept asking our accountant (she is very nice but young) is there any way to contribute to our Roth and she said no way, your income is too high, I don’t recommend any games with contributing to Traditional Ira and then converting it… is she right or should I find a more experienced CPA? I have about $18K and my wife similar amount in her Roth, it would be nice to keep contributing to it instead of starting Traditional IRA from the scratch. Thank you everyone in advance, I really appreciate your help