The non-deductible IRA has a new point in its favor, writes Michael Kitces: It provides a way to permanently avoid the new 3.8% Medicare surtax on net investment income that took effect this year. The law carves out an exception for growth that occurs inside retirement accounts. Using a non-deductible IRA to escape paying this surtax is a strategy especially well-suited to high-income earners who find a Roth conversion unappealing and who want to hold fixed-income investments that would be taxed at ordinary income rates.

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