VerCalc
Taxes
401k Ira Tax Savings
Federal • 2024/2025 • Pre‑tax contribution delta

401(k) / IRA Tax Savings

Estimate how much federal income tax you save by increasing pre‑tax retirement contributions.

Inputs

Estimator assumes your entered contributions reduce AGI as pre‑tax.

Contributions

Estimated savings

Additional pre‑tax contributions
$10,000
Estimated federal tax saved
$2,200
~$220 saved per $1,000 (approx).
AGI (current → new)
$102,000 → $92,000
Reminder

This is federal income tax only and assumes the entered contribution is pre‑tax and deductible. Plan limits and IRA deductibility rules can change the outcome.

Notes & tables

Quick tax tables (2025 vs 2026) — why your ‘tax saved’ can change


Standard deduction

Filing status
2025
2026
Single
$15,000
$16,100
Married Filing Jointly
$30,000
$32,200
Head of Household
$22,500
$24,150
Married Filing Separately
$15,000
$16,100

Ordinary income brackets (Single / MFJ / HOH)

Year
10% top
12% top
22% top
24% top
32% top
35% top
37% starts
2025 — Single
$11,925
$48,475
$103,350
$197,300
$250,525
$626,350
$626,351+
2026 — Single
$12,400
$50,400
$105,700
$201,775
$256,225
$640,600
$640,601+
2025 — MFJ
$23,850
$96,950
$206,700
$394,600
$501,050
$751,600
$751,601+
2026 — MFJ
$24,800
$100,800
$211,400
$403,550
$512,450
$768,700
$768,701+
2025 — HOH
$17,000
$64,850
$103,350
$197,300
$250,500
$626,350
$626,351+
2026 — HOH
$17,700
$67,450
$105,700
$201,775
$256,200
$640,600
$640,601+

The core idea (why this can be powerful)


Pre‑tax contributions can lower your AGI, which can:


•Reduce taxable income directly
•Potentially keep you out of a higher bracket
•Sometimes improve eligibility for certain deductions/credits (depends on the situation)

This tool estimates your federal tax difference between your current and new contribution level.


Example: why savings can jump near bracket boundaries


Situation
What happens
Why it matters
You’re barely in a higher bracket
Extra pre‑tax dollars push you back
Some income is taxed at a lower marginal rate
You’re solidly inside one bracket
Savings are roughly linear
Tax saved ≈ marginal rate × contribution

Table: quick intuition on marginal savings


Your marginal bracket
Approx. tax saved per $1,000 pre‑tax contribution
12%
~$120
22%
~$220
24%
~$240
32%
~$320

Practical tip (end of year)


If you’re increasing contributions late in the year:


•Check your remaining pay periods
•Consider employer match rules
•Avoid exceeding annual limits (this estimator doesn’t enforce every plan rule)

Related calculators (internal linking)


•Want to plan 401(k) growth? [401(k) Calculator](/us/retirement/401k-calculator)
•Choosing deductions? [Standard vs Itemized](/us/taxes/standard-vs-itemized-deductions)
•Checking refund effect? [Tax Refund Estimator](/us/taxes/tax-refund-estimator)

Related tools

•[401(k) Calculator](/us/retirement/401k-calculator)
•[Tax Refund Estimator](/us/taxes/tax-refund-estimator)

FAQ (10)

How does increasing 401(k) contributions lower my taxes?

Traditional 401(k) contributions are typically pre‑tax, reducing taxable wages and AGI. Lower taxable income can reduce federal income tax based on your marginal bracket.

Is Roth 401(k) included?

No. Roth contributions are usually after‑tax and don’t reduce current federal taxable income. This tool estimates savings from pre‑tax contributions.

Does a traditional IRA always reduce taxes?

Not always. IRA deductibility depends on income, coverage by a workplace plan, and filing status. This calculator treats the entered amount as pre‑tax for estimation purposes.

What is marginal tax rate?

Your marginal rate is the rate applied to your next dollar of taxable income. Pre‑tax contributions often save tax roughly at the marginal rate (unless you cross bracket boundaries).

Can increasing contributions change my tax bracket?

Yes. If it reduces taxable income below a bracket threshold, part of your income may be taxed at a lower rate. The estimator reflects bracket changes.

Is this federal only?

Yes. State tax treatment varies by state. Use this as a federal planning estimator.

Does it include FICA (Social Security/Medicare)?

No. This tool estimates federal income tax only. Payroll taxes and plan-specific rules can affect take-home pay differently.

Why does my tax savings look smaller than expected?

If you’re mostly in lower brackets or already have large deductions, reducing income further may have limited impact. Also, credits/phaseouts are not fully modeled here.

Can I use this for 2024 and 2025?

Yes. Choose the year and filing status; the estimator uses year-specific standard deductions and federal brackets.

Is this accurate enough for payroll decisions?

Use it for a quick estimate. Final results depend on your full return and plan rules. Confirm with payroll/tax software if making major changes.

Does employer match change my tax savings?

Employer match increases retirement savings, but match amounts aren’t usually treated as your taxable wages in the same way. This calculator focuses on your pre‑tax contribution’s effect on federal income tax.

Can contributions reduce my refund instead of increasing it?

They often increase refunds (or reduce what you owe) by lowering tax. But if you also change withholding at the same time, the refund can move either way—refund is tax minus payments.

Is lowering AGI helpful beyond income tax?

Sometimes. Lower AGI can affect eligibility for certain deductions and credits, but those rules are complex and not fully modeled here.

Should I max out 401(k) or pay off debt first?

It depends on interest rates, employer match, and cash flow. Many people prioritize capturing full employer match first, then compare debt interest vs expected investment returns.