After Tax $ in a SIMPLE IRA

[Guest revier]

Are after tax dollars allowed in a SIMPLE IRA?

[Belgarath]

The only contributions permitted to a SIMPLE IRA are employee elective deferral contributions and required employer matching or nonelective contributions. Also rollovers FROM another SIMPLE IRA.

After tax contributions in the normal meaning, such as to a regular IRA, are not allowed. I suppose you could get into an esoteric discussion of whether a self employed person, for example, could make contributions but then not claim the deduction. While not an after tax contribution in the normal sense, it's possible that this could subsequently be considered basis when distributed. Or maybe not. Perhaps some of the experts in this area can help you out on that.

[Demosthenes]

As someone who is self employed, after tax contributions are not permitted in SIMPLE or SEP IRAs.

If you make the contribution and fail to claim the deduction, the IRS will make it for you when they get around to matching up the 5498s and 1040s.

Happened to a friend of mine, he had 2 IRA's in the same year, missed one from early on, never looked at all of the forms that came in before filing his taxes.

Takes a couple of years for the IRS to catch up, but they do eventually get around to correlating those 5498s (and 1099s) with the 1040s and either sending you a bill or a check.