IRA Calculator

Anyone with taxable compensation may contribute to a traditional IRA. Whether that contribution is DEDUCTIBLE is a separate question, and it hinges on one thing most people get backwards: your income only matters if you or your spouse are covered by a retirement plan at work. With no workplace plan in the picture, the deduction is unlimited by income — you could earn a million dollars and still deduct the full contribution. The phase-out simply does not apply. When a workplace plan is involved, the modified-AGI band depends on filing status, and there are three distinct joint cases rather than one. For 2026: single or head of household, the deduction phases out from $81,000 to $91,000; married filing jointly where YOU are covered, $129,000 to $149,000; married filing jointly where only your SPOUSE is covered, a far higher $242,000 to $252,000; and married filing separately, $0 to $10,000. The 2025 bands are $79,000–$89,000, $126,000–$146,000, $236,000–$246,000, and the same unindexed $0–$10,000. That spouse-covered band is routinely missed because it looks superficially like the ordinary joint case, and the gap between $149,000 and $252,000 is more than a hundred thousand dollars of deductibility. Inside a band, the calculation follows Publication 590-A Worksheet 1-2 and 26 U.S.C. § 219(g). The crucial detail is that the phase-out fraction scales the STATUTORY LIMIT, not the amount you contributed. For 2026 that limit is $7,500, or $8,600 with the $1,100 catch-up from the year you turn 50. The reduced limitation is rounded up to the next $10 and floored at $200 if positive, and only then compared against what you actually put in. A $3,000 contribution by a single filer at $86,000 MAGI is fully deductible, because the reduced limitation of $3,750 still exceeds the $3,000 contributed. Scaling the contribution instead would have reported $1,500 — a wrong answer this module is explicitly built not to give. The second half of the tool compares traditional against Roth on an after-tax basis. Both accounts grow identically: a starting balance plus a level year-end contribution, compounded annually. The Roth figure is that balance, full stop, since a qualified distribution is tax free. The traditional figure taxes everything except your basis — your nondeductible contributions come back tax free, but their growth does not — and then adds the future value of each year’s up-front tax saving, assumed invested at the same return. This produces a result that surprises people. With a fully deductible contribution, no starting balance, and the same marginal rate now and in retirement, the two accounts tie EXACTLY, regardless of the return, the contribution or the number of years. The traditional versus Roth choice is, mathematically, a pure bet on whether your future tax rate is higher or lower than today’s — nothing else. But add a starting traditional balance and the Roth pulls ahead by precisely your tax rate times that balance grown forward, because a pre-existing pre-tax balance already had its deduction taken in earlier years. $100,000 in a Roth is genuinely worth more than $100,000 in a traditional IRA. Two simplifications are worth knowing. One flat marginal rate is applied at each end, though real withdrawals climb through brackets — model those with the income tax calculator. And the model ignores required withdrawals entirely; traditional IRAs force distributions in later life, which the RMD calculator handles, while Roth IRAs do not.