My wife and I file married separately because she has student loans and if we file jointly she will pay a higher interest rate. I opened a Roth with Vanguard this year not realizing the married separately 0-$10,000 restriction. Both my wife and I have employer retirement plans and 403b so we will not get a tax deduction on IRA contributions. Our thought was to start a Roth so at retirement so we would have both taxed and tax free income should we need it.
If I rollover my Roth to a traditional IRA at Vanguard will I be taxed only on the growth of investments since this money was already taxed?
Is it wise for us to continue to make contributions to a traditional IRA if we are not eligible for a deduction? Is this equivalent to being taxed twice?
I think the way a Vanguard Traditional IRA works is I make a contribution after taxes. When I have to take an RMD I will only be taxed as ordinary income on the gains and not the initial contribution. Is this correct?