Question

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$5,500 $6,500 Mark for follow up Question 12 of 30. Ben (48) and Lisa (49) are married, and they will file jointly for 2018. Ben earned $70,000 and is an active participant his employer's retirement plan. Lisa earned $35.000. She is not covered by a retirement plan at work. They have no other income or adjustments, so their modified adjusted gross income (MAGI) is $105,000. Lisa would like to contribute $5,500 to her traditional IRA for 2018. She determines that she can deduct the full amount, since she is not an acuve participant in an employer-maintained retirement plan. Ben would also like to contribute $5,500 to a traditional IRA, but he does not want to contribute more than he can deduct for the tax year. What is his maximum deductible contribution amount? O $0 $4,400 O $5,225 O $5,500 Mark for follow up

tax law question

Answer 1

Answer) Option D ($5,500) As their Modified adjusted gross income is less then $189,000 for filing status married filing jointly. She can deduct $5,500, as phase out limit starts at $189,000.

Rule

Details about Roth IRAs are available in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) and Publication 590-B.The tax law places limits on the dollar amount of contributions to retirement plans and IRAs and the amount of benefits under a pension plan. IRC Section 415 requires the limits to be adjusted annually for cost-of-living increases. Limits by plan type (IRA, 401(k), SEP, SIMPLE IRA, 403(b), 457(b), defined benefit).

Table for 2018

Filing Status	Modified adjusted gross income (MAGI)1	Contribution Limit
Single individuals	< $120,000	$5,500
	≥ $120,000 but < $135,000	Partial contribution (calculate)
	≥ $135,000	Not eligible
Married (filing joint returns)	< $189,000	$5,500
	≥ $189,000 but < $199,000	Partial contribution (calculate)
	≥ $199,000	Not eligible
Married (filing separately)2	Not eligible	$5,500
	< $10,000	Partial contribution (calculate)
	≥ $10,000	Not eligible