Question

1) Brain, a 48-year-old single taxpayer, earned $98,000 in wages. He is not covered by an employer-sponsored retirement plan. What is his maximum allowable contribution to a traditional IRA for 2018?

A)$0 B)$5,500 C)$6,500 D)$18,500

2) Melody is single with a modified adjusted gross income of $71,000. She is covered by an employer-sponsored retirement plan. She contributed $5,500 to her traditional IRA during the year. How much may she deduct?

A)$0 B)$1,100 C)$4,400 D)$5,500

3) In 2018, Elysia (38) contributed $2,000 to a traditional IRA. She is single, and her modified adjusted gross income(MAGI) is $30,000, all from wages. Elysia has never taken a distribution from any retirement account. She is potentially eligible for a retirement savings contribution credit(Saver's Credit) of up to

A)$0 B)$200 C)$400 D)$1,000

4) Edna, a single taxpayer, has traditional IRA's with a value of $25,000 as of December 31,2017. She will turn 70 and half on November 11,2018, and will take her RMD by April1,2019. How much of distribution ahould she take to meet the RMD?

A)$0, no distribution is required B)$9,124 C)$9,434 D)$10,000

Answer 1

1) b) $ 5,500

In 2018, the maximum allowable contribution to traditional IRA is $ 5,500

2) b) $ 1,100

In 2018, Allowable deduction for contribution for MAGI of $ 71,000 is $ 1,100.

3) d) $1,000

Since Elysia MAGI is less than $ 38,000, she is allowed 50% of contribution.

$ 2,000 * 50% = $ 1,000

4) a) $ 0 no distribution is required