Tax Savings
$1,540
Tax Savings
Deductible Amount
$7,000
Roth Limit
$7,000
Marginal Rate
22.00%
Summary
Your Traditional IRA IRA is the best option. A traditional IRA deduction of $7,000 saves you $1,540 in taxes this year.
Traditional IRA contributions may be tax-deductible, reducing your taxable income now. Roth IRA contributions are made after-tax but grow and are withdrawn tax-free in retirement.
Without a workplace plan, your traditional IRA contribution is fully deductible regardless of income.
If your income is too high for both deductible traditional and direct Roth contributions, consider a backdoor Roth IRA: contribute to a non-deductible traditional IRA, then convert to Roth.
Traditional vs Roth IRA Comparison
6 rows
| Item | Traditional | Roth |
|---|---|---|
| Contribution Limit | $7,000 | $7,000 |
| Your Contribution | $7,000 | $7,000 |
| Deductible / Eligible | $7,000 | $7,000 |
| Phase-Out Start | $0 | $150,000 |
| Phase-Out End | $0 | $165,000 |
| Tax Savings (This Year) | $1,540 | $0 |
Estimate based on federal IRA contribution and deduction rules. Does not account for state tax treatment, early withdrawal penalties, or required minimum distributions. Not tax advice.