Traditional IRA Calculator

The short answer

• You can put up to $7,500 in IRAs in 2026, or $8,600 at 50 and over.
• Without a workplace plan, the whole contribution is deductible at any income.
• With one, the deduction phases out from $81,000 to $91,000 of modified AGI (single) or $129,000 to $149,000 (joint).
• A single filer earning $85,000 saves about $1,650 of federal tax on a $7,500 deduction.
• It beats a Roth when your tax rate in retirement is lower than today; with equal rates they tie.

What a traditional IRA is

An individual retirement arrangement (IRA) is an account you open yourself at a brokerage, bank or robo-adviser. With a traditional IRA, contributions may be deductible, investments grow without yearly tax, and withdrawals in retirement are taxed as ordinary income. It is the mirror image of a Roth IRA, where you pay tax now and withdraw tax-free later.

The deduction is "above the line": it lowers your adjusted gross income whether or not you itemize, which can also help you qualify for other credits and deductions.

The 2026 contribution limit

You can’t contribute more than your earned income for the year: wages, tips and net self-employment income. Pensions, interest, dividends and rental income don’t count. There is no upper age limit to contribute and no income limit; income only affects the deduction.

Who can deduct a contribution

It depends on whether you, or your spouse, are an "active participant" in a retirement plan at work for the year, such as a 401(k), 403(b), SIMPLE IRA or pension. Box 13 of your W-2 shows it.

Working out a partial deduction

Inside the range, the deductible amount falls in proportion to how far through it your income is. It is rounded up to the next $10, and if it is above zero but below $200, you can still deduct $200.

At 50 and over the same income gives a larger deduction, because the $8,600 limit is the starting point: $4,300 at $86,000. For a couple filing jointly where you are covered, the range is twice as wide: $3,750 at $139,000.

How much tax the deduction saves

The saving is the tax on the income the deduction removes, at the rates that income would have paid. The calculator runs the 2026 federal tax engine with and without the deduction.

At $140,000 joint, the deduction straddles the 12% and 22% brackets, so the saving is a blend. State tax adds more: in California, the same single filer on $85,000 saves about $685 of state tax on top, $2,335 in all. Our tax bracket calculator shows which bracket your last dollars fall in.

How much a traditional IRA can grow

Inside the IRA, dividends and gains aren’t taxed each year, so all of the return compounds. Someone who starts at 50 and contributes the $8,600 catch-up limit for 15 years at 7% builds about $227,156. Our compound interest calculator shows the effect of different rates.

Tax when you take money out

Every dollar of deductible contributions and all the growth is taxed as ordinary income when it comes out. The calculator applies one rate to the whole balance, the rate you expect on your marginal dollar in retirement. Many retirees fall in the 10% or 12% federal brackets; those with large pensions or IRAs may stay at 22% or more.

Traditional or Roth: the tax-rate test

Compare the two fairly: same cost to you each year. A $7,500 deductible contribution at 22% costs you $5,850 after the tax saving; the same $5,850 can go in a Roth.

When the rates match, the two tie exactly; the difference is only the rate you deduct at versus the rate you pay later. If you are unsure, having some money in each gives you flexibility to manage your bracket in retirement.

Traditional IRA vs a taxable account

In an ordinary brokerage account, dividends are taxed each year and gains when you sell. In the example above (1.5% dividend yield, 15% tax on dividends and gains), the taxable account leaves about $352,888 against $430,351 in the traditional IRA when the retirement rate is 15%. The taxable account wins only on flexibility: no penalty for early access and no RMDs.

Nondeductible contributions

Above the phase-out you can still contribute, without a deduction. The after-tax amount (your basis) comes back tax-free; only the growth is taxed on withdrawal. File Form 8606 every year, or you risk paying tax on the same money twice.

That is only a little more than the $452,420 a taxable account would leave, and growth is taxed at income rates rather than capital gains rates. Most people in this position instead convert the contribution to a Roth straight away, the backdoor Roth; our Roth conversion calculator shows the tax on a conversion.

Using an IRA with a 401(k)

A workplace plan doesn’t stop you having an IRA; it only limits the deduction. A common order is: 401(k) up to the full employer match, then an IRA (deductible traditional if you qualify, otherwise Roth), then back to the 401(k) toward its $24,500 limit. Our 401(k) calculator shows what the workplace part could reach.

Early withdrawals and exceptions

Withdrawals before 59½ are taxed and usually also cost a 10% additional tax. IRAs have more exceptions than 401(k)s:

• Up to $10,000 (lifetime) toward a first home.
• Qualified higher education expenses.
• Health insurance premiums while unemployed, and medical bills above 7.5% of AGI.
• Disability, terminal illness, and a series of substantially equal periodic payments.
• Up to $1,000 a year for a personal emergency, and birth or adoption costs up to $5,000.

Required minimum distributions

From 73, or 75 if you were born in 1960 or later, you must take a minimum amount out each year, starting at about 3.8% of the balance and rising. Large traditional balances can produce RMDs big enough to push you into a higher bracket and make more of your Social Security taxable. Our RMD calculator projects them.

Rollovers from old 401(k)s

When you leave a job you can roll your 401(k) into a traditional IRA without tax. Use a direct rollover (trustee to trustee); if the plan pays you, it must withhold 20% and you have 60 days to deposit the full amount. Rollovers don’t count toward the $7,500 limit. Watch out if you plan backdoor Roth contributions: pre-tax IRA money makes part of each conversion taxable under the pro-rata rule.

Spousal IRAs

A spouse with little or no income can contribute to their own IRA if you file jointly and your joint earned income covers both contributions. If the non-working spouse isn’t covered by a plan but the other is, their deduction phases out only between $242,000 and $252,000.

Deadlines and timing

You can contribute for 2026 from January 1, 2026 to April 15, 2027. Because the deduction depends on your final modified AGI, waiting until you file can make sense if you are near a phase-out. Tell your provider which year each contribution is for.

Common mistakes

• Leaving the money in cash inside the IRA.
• Claiming a deduction you aren’t entitled to because of a workplace plan.
• Not filing Form 8606 for nondeductible contributions.
• Contributing more than your earned income or the limit (a 6% excise tax each year it stays).
• Taking an indirect rollover and missing the 60-day window.

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