Elizabeth, age 55, has $5,000 net self-employment income from a consulting business. She also receives $50,000...

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Elizabeth, age 55, has $5,000 net self-employment income from a consulting business. She also receives $50,000 in dividends, of which $44,000 are qualified. What is the maximum amount that E o $4,647 o $5,500 izabeth may contribute to a RothIRA? $6,500 o $6,853 Mark for follow up

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Answer 1

Answer #1

Answer is c). $6,500.

As per IRS, the maximum contribution which can be done to a Roth IRA is $5,500 if the age of worker is below 50. But if the age of person is 50 or more than there is an extra $1000 which can be contributed by person as a 'Catch up' contribution.

So as the age of Elizabeth is 55, maximum contribution which is possible is $5,500 + $1,000 = $6,500

This limit of $5,500 is for the year 2018, and increased to $6,500 for 2019 with 'Catch up' contribution remaining same.

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Answer 2

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Elizabeth, age 55, has $5,000 net self-employment income from a consulting business. She also receives $50,000...

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