Carri and Dane, ages 34 and 32, respectively, have been married for 11 years, and both are active participants in employer qualified retirement plans. Their total AGI in 2019 is $196,000, and they earn salaries of $87,000 and $95,000, respectively.
Compute the following amounts. If an amount is zero, enter "0". Do not round intermediate computations.
Amount
a. The amount each can contribute to a regular IRA. $
b. The amount each can deduct for regular IRA contributions. $
c. The amount each can contribute to a Roth IRA. $
d. The amount each can deduct for Roth IRA contributions. $

Question

contestada

Respuesta :

Tundexi Tundexi · Answer 1 · 2020-10-07T03:58:01+02:00

Answer:

a. $6,000

b. $0

c. $4,200

d. $0

Explanation:

a. Carri and Dane can each contribute $6000 to their traditional IRA as they both are below 50.

b. Nobody from Carri and Dane can deduct the contribution to a traditional IRA as their AGI is greater than phase-out ceiling of $123000 in 2019.

c. Carri and Dane can each contribute $4,200 to their Roth IRA

Calculation

Excess AGI = AGI - beginning threshold

Excess AGI = $196,000 - $193,000

Excess AGI = 3000

Phaseout = 3000/(203000-193000)

Phaseout = 30%*6000

Phaseout = $1,800

Contribution ceiling = $6,000 - $1,800

Contribution ceiling = $4,200

d. For a contribution to a Roth IRA, there is no deduction available.