Reviewed and updated October 16, 2026
Rules and decisions to review
- Pretax workplace contributions and deductible traditional IRA contributions can reduce current taxable income, subject to applicable rules.
- Roth contributions generally use after-tax funds and can support tax-free qualified withdrawals later.
- An employer plan and an IRA have different limits and eligibility rules; participating in one can affect deduction treatment in the other.
- Self-employed business owners should compare plan administration, employee coverage obligations and contribution calculations before choosing a retirement arrangement.
A practical example
An owner with employees should not select a plan solely because a headline advertises a high contribution limit. Employer contributions, eligible-worker coverage and administration costs can change the decision.
Records to gather
Gather year-to-date compensation, payroll deductions, employer match details, business profit and existing account balances.
Your next step
Compare pretax and Roth treatment using your projected household income. Business owners should also review eligible employees, plan setup and administration before choosing a contribution strategy.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
