What is a non tax-deferred ira?

Any money that contributes to a traditional IRA and that you don't deduct on your tax return is a “non-deductible contribution.” You must still declare these contributions on your return, and to do so, you must use Form 8606.Reporting them saves you money in the future. They don't pay the same taxes. In both types of accounts, money is contributed after taxes. In other words, the investor pays the income tax due that year on the money deposited in the account.

With the prorated rule, when you make non-deductible contributions to an IRA, a certain percentage of your RMD is tax-free. However, because you made after-tax contributions, your total pool of assets subject to RMDs increases.