\n<\/p>\n
Step 1: Earn Compensation.<\/strong> Salary, self-employment, commissions, or a spouse’s earned income all count. Without it, no IRA contributions.<\/p>\n Step 2: Roth Income Testing.<\/strong> Under the modified adjusted gross income (MAGI) limit? You can contribute directly. On this? Consider the backdoor Roth path \u2013 a non-deductible traditional contribution that you can convert to a Roth.<\/p>\n Step 3: Workplace Plan Coverage.<\/strong> A 401(k), 403(b), SEP IRA, SIMPLE IRA, or pension from any employer puts you in the “covered” bucket – even if you don’t participate. Availability matters, not participation.<\/p>\n Step 4: Traditional Cut Testing.<\/strong> If you or your spouse are covered and income is above the phase-out, the Traditional IRA deduction disappears. The Roth becomes the clear winner because otherwise you will pay taxes along the way and lose the tax-free withdrawals.<\/p>\n Step 5: Discipline Check.<\/strong> When the traditional IRA deduction is on the table, the math supports it \u2014 but only if you actually invest the tax refund. <\/p>\n According to financial planner Larry Russell, “For savers who reinvest tax savings, traditional wins. For savers who spend refunds, Roth wins by imposing discipline.”<\/p>\n<\/div>\n What to keep in mind: <\/strong>2026 phase-out moved. Single covered filers lose the earlier $2,000 deduction through 2025 (the limit now starts at $81K vs. $79K), and the Roth MAGI cap for married filing jointly jumps to $242K-$252K. If you were close to a limit last year, run the tree again before making the 2026 contribution.<\/p>\n Don’t miss these other stories:<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" How to Use the IRA Decision Tree Step 1: Earn Compensation. Salary, self-employment, commissions, or a spouse’s earned income all count. Without it, no IRA contributions. Step 2: Roth Income Testing. Under the modified adjusted gross income (MAGI) limit? You can contribute directly. On this? Consider the backdoor Roth path \u2013 a non-deductible traditional contribution<\/p>\n","protected":false},"author":1,"featured_media":84355,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[60],"tags":[1776,11316,14162,8184],"class_list":["post-84335","post","type-post","status-publish","format-standard","has-post-thumbnail","category-meditation","tag-decision","tag-irs","tag-limits","tag-tree"],"_links":{"self":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/84335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/comments?post=84335"}],"version-history":[{"count":1,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/84335\/revisions"}],"predecessor-version":[{"id":84357,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/84335\/revisions\/84357"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media\/84355"}],"wp:attachment":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media?parent=84335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/categories?post=84335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/tags?post=84335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}