Understanding the IRA
Who Is This Account For?
The Traditional IRA is a strong fit for Muslim investors in the US who want an immediate tax break while growing their retirement savings in a fully Shariah-compliant environment. It is particularly well-suited for professionals who expect to be in a lower tax bracket during retirement than they are today.
Annual Limites (2026)
The base contribution limit is $7,500. For individuals age 50 or older, the maximum limit is $8,600, which includes an eligible $1,100 catch-up contribution.
If Covered by a Workplace Plan (2026)
Your tax deduction phases out if your income exceeds specific thresholds:
Single / Head of Household: Full deduction if your MAGI is $81,000 or less. The deduction phases out completely above $91,000.
Married Filing Jointly: Full deduction if your combined MAGI is $129,000 or less. The deduction phases out completely above $149,000.
Married Filing Jointly (Non-covered spouse with a covered spouse): Full deduction if your combined MAGI is $242,000 or less. The deduction phases out completely above $252,000.
If Not Covered by a Workplace Plan
You can deduct the full amount of your contribution regardless of your income level.
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