What type of contributions are Roth IRA contributions categorized as?

Roth IRA contributions are categorized as non-deductible contributions. This means that when you contribute to a Roth IRA, you are using after-tax dollars; you do not receive any tax deduction for your contributions in the year you make them. This is an essential feature of the Roth IRA, as the tax benefit comes later—when you withdraw the funds during retirement, provided certain conditions are met, these withdrawals are generally tax-free.

The design of the Roth IRA encourages savings for retirement by allowing your investments to grow tax-free, and ultimately provides tax-free withdrawals, which can be a significant advantage for long-term financial planning. Understanding this characteristic clarifies why contributions cannot be deducted from your taxable income, denoting them specifically as non-deductible.