What happens to the amount of an IRA contribution that isnt deductible?
The amount of your IRA contribution which is not deductible is considered a nondeductible contribution. You may choose to make a nondeductible contribution even if you could have deducted part or all of the contribution. Interest or other earnings on your IRA contribution will not be taxed until distributed to you. Although you may not receive a deduction, you can still contribute up to the lesser of 100% of compensation or $5,000 (or $6,000 if over the 50 years old) and $10,000 for Spousal IRAs (or $12,000 if spouses are over the 50 years old) for the 2009 tax year.
