The IRS just moved the goalposts on who can fund a Roth IRA, and a lot of people who squeaked in last year are about to get locked out.
For 2026, the income phase-out for single filers starts at $153,000 and fully closes at $168,000.
Married couples filing jointly can contribute in full up to $242,000, with the door shutting completely at $252,000.
Those numbers are up slightly from 2025, but here's the catch: if your raise, bonus, or side hustle pushed you past the line, you can't just write a check to your Roth anymore.
The contribution limit itself stays at $7,000 for people under 50, plus a $1,000 catch-up for those 50 and older.
The phase-out works like a dimmer switch, not an on/off button.
If you're single and earn $160,000, you don't get the full $7,000 — you get a reduced amount.
Do the math wrong and you're staring at a 6% excise tax on the excess every year until you fix it.
What trips people up is that "income" here isn't your salary line on your W-2.
It's modified adjusted gross income, which can include bonuses, taxable investment gains, and some deductions added back.
A year-end distribution from a mutual fund can quietly push you over the cliff.
The good news: you're not actually stuck.
If you earn too much for a direct Roth contribution, the backdoor Roth strategy still exists.
You contribute to a traditional IRA — no income limit there — then convert it to a Roth.
The catch is the pro-rata rule, which taxes the conversion based on any pre-tax money you already hold in traditional IRAs.
That last detail is where people get burned.
If you've got $50,000 sitting in a rollover IRA from an old job, your "clean" backdoor conversion gets messy fast, and part of it becomes taxable.
Some savers move that pre-tax money into a 401(k) first to clear the path.
Roth conversions also aren't free money if you're in a high bracket now.
You pay ordinary income tax on whatever you convert, so a big conversion in a high-earning year can sting.
Spreading conversions across lower-income years — say, an early retirement gap — is the standard play.
For 2026, the traditional IRA deduction phase-out also shifted.
If you're covered by a workplace plan, single filers lose the deduction between $81,000 and $91,000, while joint filers phase out between $129,000 and $149,000.
The spousal IRA rules add another layer most people miss.
Here's the part nobody likes hearing: the IRS doesn't send you a warning letter when you cross the threshold.
You're expected to know your MAGI before you contribute, and if it changes by December, you may need to unwind or recharacterize the contribution before you file.
The practical move is to check your income projection in the fall, not in April.
If you're near the edge, wait until you know your final numbers, or use the backdoor route from the start so a surprise bonus doesn't create a paperwork headache.
My take: these limits punish savers who are doing the right thing, and the phase-out cliffs make the system feel rigged against anyone whose income wobbles.
But the rules are the rules, and a five-minute check on your projected MAGI beats a 6% penalty.
Final Thoughts
Know your number before you fund the account.