Roth vs Traditional IRA at $150,000 income: at the edge of the Roth phase-out
$150,000 of MAGI is the magic number for single filers in 2026. It is the floor of the Roth IRA phase-out range ($150K to $165K). At $150K exactly you can still contribute the full $7,000. From $150,001 to $164,999 you can make a partial Roth contribution calculated under the reduced-contribution formula in IRC §408A(c)(3)(B). At $165K and above, direct Roth contributions are not allowed. The backdoor Roth is the standard hedge. MFJ filers at $150K combined are well under the MFJ phase-out ($236K to $246K) and have no phase-out concerns at this income.
The 2026 Roth IRA phase-out grid
| Filing status | Full $7,000 if MAGI below | Partial allowed in | Zero direct contribution above |
|---|---|---|---|
| Single / HoH | $150,000 | $150K to $165K | $165,000 |
| Married filing jointly | $236,000 | $236K to $246K | $246,000 |
| Married filing separately | $0 | $0 to $10K | $10,000 |
Source: IRS Notice 2024-80 for 2026 cost-of-living adjustments under IRC §415(d).
The reduced-contribution formula worked out
IRC §408A(c)(3)(B) sets the reduction as linear across the phase-out range. For single 2026, the phase-out width is $15,000 ($150K floor to $165K cap). The formula:
Allowed contribution = ($165,000 - MAGI) / $15,000 × $7,000
Round down to the nearest $10. There is a $200 floor: if the formula produces less than $200, you can still contribute $200 (unless you are over the cap entirely, in which case zero).
Worked examples for 2026 single:
- MAGI $150,000: allowed = ($165K - $150K) / $15K × $7,000 = $7,000 (full)
- MAGI $153,000: allowed = ($165K - $153K) / $15K × $7,000 = $5,600
- MAGI $157,500: allowed = ($165K - $157.5K) / $15K × $7,000 = $3,500
- MAGI $162,000: allowed = ($165K - $162K) / $15K × $7,000 = $1,400
- MAGI $164,990: allowed = $200 (floor)
- MAGI $165,000: zero (above cap)
For MFJ 2026 the formula uses the $236K floor and $10K width. The MFJ phase-out width is narrower, so the contribution drops to zero faster once you enter the band.
The catch-up contribution ($1,000 for age 50+) follows the same phase-out reduction. A 52-year-old single filer at $157,500 MAGI in 2026 can contribute $3,500 of base plus $500 of catch-up for a total of $4,000.
The MAGI estimation problem and the recharacterisation lifeline
The partial-Roth-contribution approach has a practical risk: you have to estimate your year-end MAGI accurately enough to know which contribution you can make. If you contribute $5,600 based on a MAGI estimate of $153K, but the year actually closes at $158K, your allowed contribution was $4,200 and you over-contributed $1,400. The over-contribution triggers a 6% excise tax per year until corrected (IRC §4973).
The Tax Cuts and Jobs Act of 2017 §13611 ended the recharacterisation of Roth conversions. But recharacterisation of contributions (not conversions) is still allowed. If you contributed $5,600 to Roth and later determined you should have contributed only $4,200, you can recharacterise the excess $1,400 (plus attributable earnings) from the Roth IRA to a Traditional IRA. The deadline is the tax-filing deadline including extensions (15 October 2027 for tax year 2026).
Or you can simply withdraw the excess plus earnings before the filing deadline. Either approach avoids the 6% excise tax.
Pragmatic alternative: contribute the minimum confident amount in January, then top up in late December once your MAGI is nearly final. This converts the risk of over-contribution into the risk of slightly under-contributing.
Alternative-alternative: use the backdoor Roth from the start. Contribute $7,000 non-deductible to a Traditional IRA early in the year, then convert to Roth. The backdoor is not income-limited and produces the full $7,000 in Roth regardless of year-end MAGI. The pro-rata rule on existing pre-tax IRA balances is the catch; see the backdoor Roth page for the full mechanics.
$150K MFJ vs $150K single
A married couple at combined $150K MFJ MAGI is structurally in a much better Roth position than a single filer at $150K. The MFJ phase-out doesn't start until $236K MAGI, so both spouses can each contribute the full $7,000 ($14,000 total household) with no phase-out worry.
The bracket math is also more favourable. The 12% MFJ bracket runs to $96,950 of taxable income and the 22% bracket to $206,700 (2026). A couple at $150K gross with the $31,500 MFJ standard deduction has taxable income around $118K, putting them in the 22% bracket. The marginal cost of a Roth contribution is 22%. Same as the single filer at $100K.
For MFJ at $150K combined, the answer is the same Roth-first playbook: max both Roth IRAs ($14K total household), then build the 401(k) match capture, then mix pre-tax / Roth in the 401(k) for the rest. No phase-out worry until household MAGI climbs past $236K.
The decision rule for $150K income
Single filer at exactly $150K MAGI: full Roth IRA at $7,000. The phase-out floor is $150K, but the reduction does not kick in until $150,001. The partial-reduction risk is real once you nudge into the phase-out band.
Single filer at $151K-$164K MAGI: partial Roth or backdoor Roth. The partial Roth uses the reduced-contribution formula. The backdoor Roth gives you the full $7,000 cleanly. Backdoor is the better default if your MAGI is reliably above the floor.
Single filer at $165K+ MAGI: backdoor Roth only. Direct Roth is not available. Backdoor Roth is the standard path. Watch the pro-rata rule on any existing pre-tax IRA balance.
MFJ at $150K combined: full $14,000 household Roth. Both spouses can each contribute $7,000. The MFJ phase-out doesn't start until $236K MAGI.
Always take the full 401(k) match first before any IRA contribution. The match is structurally a higher-return investment than any IRA decision.
FAQ
Can I contribute the full $7,000 to a Roth IRA at exactly $150K single MAGI?
Yes. The 2026 single phase-out is $150K to $165K, and the reduction only kicks in above $150K. At $150,000 MAGI exactly, full $7,000 contribution allowed.
What is the partial Roth contribution at $158K single MAGI in 2026?
$3,200. Formula: ($165K - $158K) / $15K × $7,000 = $3,266, rounded down to nearest $10 = $3,260. (Verify with the IRS worksheet in Pub 590-A; minor IRS rounding conventions may produce small differences.)
Can I just do a backdoor Roth at $150K single?
Yes, and many advisors recommend it as the default once you're anywhere in the phase-out range. Backdoor avoids the MAGI estimation risk and produces the clean $7,000 contribution. Watch the pro-rata rule.
What if I over-contribute to a Roth IRA?
6% excise tax per year on the excess until corrected (IRC §4973). Two correction methods: (1) recharacterise the excess to a Traditional IRA by the tax-filing deadline including extensions, or (2) withdraw the excess plus attributable earnings by the filing deadline.
Is MFJ at $150K different from single at $150K for Roth IRA?
Yes, dramatically. MFJ at $150K combined is well under the MFJ phase-out start of $236K (2026), so both spouses can contribute the full $7,000 each. No phase-out worry.
Does the catch-up contribution also get phased out?
Yes. The $1,000 catch-up follows the same linear reduction. A 52-year-old single filer at $157,500 MAGI gets half the base and half the catch-up: $3,500 + $500 = $4,000 total.
Not financial, tax, or legal advice. Figures sourced from IRS Notice 2024-80 (2026 phase-outs), IRC §408A(c)(3)(B) (reduced contribution formula), IRC §4973 (excise tax on excess contributions), IRC §408A(d)(6) (recharacterisation rules), Tax Cuts and Jobs Act §13611 (recharacterisation of conversions ended). Tax laws change. Consult a fiduciary financial advisor, CPA, or qualified retirement planner.