Contributions to a Roth IRA are treated for tax purposes as

• A. Fully tax deductible
• B. Not tax deductible
• C. Taxable when contributed
• D. Taxed at withdrawal only

Answer: (B)

Contributions to a Roth IRA are made with after-tax dollars, so they are not tax deductible. You pay income tax on the money before it goes into the account, and you don’t get a deduction on your current tax return. The payoff is tax-free growth inside the account and tax-free qualified withdrawals in retirement. This contrasts with traditional IRAs, where contributions can be deductible if you meet certain criteria. An added practical point: since you’ve already paid tax on contributions, those contributions can be withdrawn anytime without tax or penalty, though earnings taken out early may face taxes and penalties unless the distribution is qualified.