Couple pictures for reference!

Doesn't look like you have enough room to do a powder room under the stairs, but without a floor plan it's really hard to say.

Yeah I know not the most spacious, I'm not expecting a large bathroom, but I've seen some creative solutions on Pintrest and I'm hoping to squeeze something in there. So far my fall back is to eliminate the garage door in order to accomadste it, but I'm hoping someone can give me some solution I'm overlooking (I still feel like some sort of spiral staircase might help me)

So apparently according to a stair maker we had come by, the slope of the stairs is at a comfort hieght, and it can be made steeper in order to create a farther landing at the top, which would give us about 7 feet of head clearance below the stairs, before it starts to slope downwards, so on the low side about 4 feet out we would have about 5 and a half feet of height (which is where we would put a toilet) so it works in theory, it just isn't my number one choice.... If I was to eradicate the garage I could put a very decent sized powder room for sure, looking for any options that I might be overlooking though, from a layout perspective

I think this is why we try to live in a house for at least a year before remuddling it. If that door to the garage is the only way into the house without going outside, you are out of luck. You need it to stay. Who wants to pull into the garage and then walk outside in the rain to bring in the groceries - or the baby?

A spiral staircase makes taking things like furniture and mattresses to the second floor a real pain. Your current stairway makes this easy. My parents once bought a farmhouse and when we moved in, they could not get anything but twin beds up the steep staircase because it had a regular door at the end. So the parents had to sleep downstairs. Steep staircases are harder on children and dogs and even on mothers carrying children.

You may find that you eventually decide to move a wall, making another room smaller to fit in a half bath. Living there will let you know how you use it and where you can spare the space. Or it may give you time to save to do a bump-out into the garage or out the side of the house.

Floorplan of the whole first floor. I'll bet there's a better space.

Speaking of dogs, under that staircase you have the perfect doggy get-away. Or place for the cat box. Or both (separated spaces). Or built-ins for boots, backpacks, shoes, and coats. Kiddo lockers.

You said it works "in theory." Is it up to code?