Direct Answer

Start by checking taxable compensation, direct Roth eligibility, and Traditional IRA deductibility. Only then compare today's marginal tax rate with the likely rate on future Traditional withdrawals. If the tax-rate result is close, use contribution-cap economics, Roth flexibility, RMD exposure, existing account balances, and household tax diversification as tie-breakers.

Step 1: Do You Have Taxable Compensation for a Regular IRA Contribution?

Yes: Continue to Step 2.

No: Check whether a spousal IRA rule applies on a joint return. If not, a regular IRA contribution may be limited or unavailable.

The annual dollar limit is not the only cap. Regular IRA contributions are generally limited to taxable compensation when compensation is lower. See IRS: IRA Contribution Limits.

Step 2: Is a Direct Roth IRA Contribution Available at Your Expected 2026 MAGI?

2026 direct Roth phase-out ranges:

• Single or head of household: $153,000-$168,000.
• Married filing jointly: $242,000-$252,000.
• Married filing separately and lived with spouse: $0-$10,000.

Source: IRS: Publication 590-A.

If clearly below the phase-out

Keep direct Roth in the comparison.

If inside the phase-out

Calculate the permitted partial Roth contribution. Do not assume the full annual IRA limit is available for Roth.

If at or above the cutoff

Stop modeling a direct Roth contribution as though it were available. The relevant next comparison may involve:

• deductible Traditional IRA;
• nondeductible Traditional IRA;
• Roth conversion / backdoor Roth mechanics;
• Roth 401(k) or other workplace Roth option;
• taxable investing.

Step 3: Would the Traditional IRA Contribution Actually Be Deductible?

If the contributor is covered by a workplace retirement plan, the 2026 Traditional IRA deduction phase-out includes:

• Single/HOH: $81,000-$91,000.
• MFJ: $129,000-$149,000.
• MFS: special $0-$10,000 range.

If the contributor is not covered but the spouse is and the couple files jointly, a separate $242,000-$252,000 phase-out applies.

Source: IRS: Publication 590-A.

Full deduction

Continue to the tax-rate comparison.

Partial deduction

Model the actual deductible amount. Do not treat the entire contribution as pre-tax.

No deduction

Do not credit Traditional with a current tax saving. The comparison has changed. If the money is being contributed as after-tax basis, Form 8606 reporting becomes important. See IRS: Form 8606.

Step 4: Which Marginal Tax Rate Is Higher: Now or on the Expected Future Withdrawal?

Current marginal rate is clearly lower

Roth tax timing strengthens. You are paying the tax at the relatively cheaper point in the model.

Current marginal rate is clearly higher

Deductible Traditional tax timing strengthens. You are avoiding tax at the relatively more expensive point and expecting to recognize taxable income later at a lower marginal rate.

Rates are similar or future rate is highly uncertain

Continue to Step 5. Structural factors become more important.

For 2026, the federal individual marginal rate structure is 10%, 12%, 22%, 24%, 32%, 35%, and 37%. See IRS 2026 Tax Inflation Adjustments.

Step 5: Are You Likely to Max the IRA?

The combined 2026 limit is $7,500, or $8,600 at age 50+. See IRS: IRA Contribution Limits.

No

An equal-pre-tax-cost comparison is relatively straightforward. Continue.

Yes, and Roth taxes can be paid from outside cash

A maxed Roth places the full contribution as after-tax economic value inside the retirement wrapper. A maxed deductible Traditional contribution creates current tax savings outside the account.

Model the Traditional IRA plus the tax savings if those savings will be invested.

Yes, but Traditional tax savings would probably be spent

Recognize that the practical comparison now includes a savings-behavior difference. Do not call the result a pure tax-law advantage.

Step 6: Is There a Major Flexibility Factor?

Possible Roth factors

• access to regular contribution principal under Roth ordering rules;
• no lifetime RMDs for the Roth IRA original owner;
• need for more tax-free retirement assets;
• survivor or estate flexibility.

Possible Traditional factors

• high-value current deduction;
• future low-income Roth-conversion window;
• later charitable distribution planning when eligible;
• desire to add pre-tax assets to a Roth-heavy household.

See IRS: Publication 590-B and IRS: RMD FAQs.

Step 7: What Does the Household Already Own?

Mostly pre-tax retirement assets

Additional Roth money can increase tax diversification.

Mostly Roth retirement assets

A deductible Traditional contribution can add a different tax bucket and create a current deduction.

Planning a backdoor Roth

Before treating the conversion as simple, identify all Traditional, SEP, and SIMPLE IRA balances and review Form 8606 basis mechanics. See IRS: Form 8606 Instructions.

Step 8: Check Whether Another Priority Precedes the IRA Decision

Ask:

• Is an employer match available and not yet captured?
• Is high-cost debt consuming cash flow?
• Is the emergency reserve inadequate?
• Is an HSA available and valuable for the household?
• Is the user trying to solve a short-term goal with retirement money?

The purpose of this step is not to rank every financial goal universally. It is to prevent a precise Roth-versus-Traditional answer from distracting from a more important unresolved household issue.

Decision Outputs

The decision tree returns one of four outputs, not a personalized command.

Output A: Factors currently favor Roth

Use when several of these align:

• direct Roth is available;
• current marginal rate is relatively low;
• Traditional deduction is weak or unavailable;
• household is heavily pre-tax;
• Roth structural flexibility has material value.

Output B: Factors currently favor a deductible Traditional IRA

Use when:

• full deduction is available;
• current marginal rate is relatively high;
• expected future withdrawal rate is lower;
• current deduction has meaningful value;
• Roth-specific flexibility does not outweigh the rate spread.

Output C: A split may reduce forecast risk

Use when:

• both account types are available;
• tax-rate difference is small or uncertain;
• household lacks tax diversification;
• neither account has a decisive structural advantage.

Output D: Resolve a rule before deciding

Use when:

• expected MAGI is near a phase-out;
• workplace-plan coverage is unknown;
• Traditional deduction status is uncertain;
• backdoor Roth pro-rata exposure is unresolved;
• taxable compensation is unclear.

Plain-Text Flowchart

Taxable compensation?
 ├─ No → Spousal IRA rule available?
 │       ├─ No → regular IRA contribution may be unavailable
 │       └─ Yes → continue under joint-return rules
 └─ Yes
     ↓
Direct Roth eligible?
 ├─ No → compare Traditional / backdoor Roth / workplace Roth / taxable
 ├─ Partial → calculate permitted Roth amount
 └─ Yes
     ↓
Traditional deductible?
 ├─ No → do not assign a current Traditional tax benefit
 ├─ Partial → model only actual deduction
 └─ Yes
     ↓
Current marginal rate vs future withdrawal rate?
 ├─ Current lower → Roth factors strengthen
 ├─ Current higher → deductible Traditional factors strengthen
 └─ Similar/uncertain → continue
     ↓
IRA cap binding?
 ├─ Yes → compare equal household cost + treatment of Traditional tax savings
 └─ No → continue
     ↓
Major flexibility factor?
 ├─ Roth factor dominant → Roth factors strengthen
 ├─ Traditional/conversion/QCD factor dominant → Traditional factors strengthen
 └─ None → continue
     ↓
Household tax-bucket concentration?
 ├─ Mostly pre-tax → Roth diversification value rises
 ├─ Mostly Roth → deductible Traditional diversification value rises
 └─ Balanced → keep tax-rate result

References

1. IRS: IRA Contribution Limits
2. IRS: Publication 590-A, Contributions to Individual Retirement Arrangements
3. IRS: Publication 590-B, Distributions from Individual Retirement Arrangements
4. IRS: About Form 8606, Nondeductible IRAs
5. IRS: Form 8606 Instructions
6. IRS: Required Minimum Distributions FAQs
7. IRS: 2026 Tax Inflation Adjustments

Educational decision support only, not individualized tax advice.