Question

Karen, 28 years old and a single taxpayer, has a salary of $33,000 and rental income of $33,000 for the 2019 calendar tax year. Karen is covered by a pension through her employer. AGI phase-out range for traditional IRA contributions for a single taxpayer who is an active plan participant is $64,000 – $74,000.

What is the maximum amount that Karen may deduct for contributions to her traditional IRA for 2019?

Note: 6000 isnt working!

Answer 1

Answer -

Step - (1) - Information Given -

Karen, 28 years old and a single taxpayer, has a salary of $33000 and rental income of $33000 for the 2019 calendar tax year. Karen is covered by a pension through her employer.

AGI phase-out range for traditional IRA contributions for a single taxpayer who is an active plan participant is $64000 -- $74000.

.

Step - (2) - Computation of maximum amount that Karen may deduct for contributions to her traditional IRA for 2019 -

Particulars	Explanation	Amount ($)
Deduction for traditional IRA contribution	The maximum contribution limit for traditional IRA is $6000. AGI phase-out range for traditional IRA contributions for a single taxpayer is $64000 - $74000. Karen's AGI = ($33000 + $33000) = $66000. Therefore, Deduction for traditional ​​​​​​​IRA contribution - = [($74000 - $66000) / ($74000 - $64000)] * $6000 = $4800	4800