How to Deduct a Roth IRA on Taxes

You don't actually deduct Roth IRA contributions from your taxable income. The IRS reserves that perk for traditional IRAs. The key Roth benefit, which keeps it distinct from a traditional IRA, is that the IRS allows you to take Roth distributions, including earnings, tax-free once you hit age 59-1/2 and have held your account for at least five tax years, according to IRS Publication 590. You cannot, however, ignore your annual Roth activity vis-a-vis the IRS.

Stalk your mail carrier some time around the end of January or the very beginning of February. At this point, he should be dropping an IRS Form-5498 in your mailbox from each of the companies you own an IRA with.

Review IRS Form-5498. In Box 10, as of the 2010 tax year version, your IRA custodian -- the firm that you opened your account with or transferred it to -- inputs the total amount of your Roth contributions for the tax year in question. For instance, if you're receiving the form in January 2011, the number in the box refers to 2010 contributions. You have until April 15, 2011 to make IRA contributions that count toward the 2010 tax year.

Prepare your tax return or provide Form-5498 to the person who prepares your taxes for you. Exactly how and where to input the information from Form-5498 varies by the tax forms you file and your individual situation. Nevertheless, the general process is the same. Ultimately, the IRS wants to know how much you contributed to all IRAs so it can figure your eligible traditional IRA deduction. The IRS also wants to determine if you exceeded the combined annual IRA contribution limit for that year.


  • As of November 2010, the IRS allows you to contribute $5,000 a year to all of your IRAs combined. If you are 50 years of age or older, the IRS permits an annual contribution of up to $6,000. These numbers are subject to change at the whim of Congress, Uncle Sam and your crazy Aunt Mable.
  • For illustration purposes, if you’re 28-years-old and contributed $2,100 to traditional IRAs and $3,000 to Roth IRAs in a given tax year, you contributed $100 too much. As Publication 590 details, in most cases, the IRS hits you with a 6-percent tax on excess contributions if you don't remove them before the date your return for that year is due.

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About the Author

As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. His work has appeared on SFGate and Planetizen and in the journals "Environment & Behavior" and "Health and Place." Pendola has a Bachelor of Arts in urban studies from San Francisco State University.