Tucker (age 52)and Elizabeth (age 48)are a married couple.Tucker is covered under a qualified retirement plan at his job and earned $90,000 in 2016.Elizabeth is employed as a lab technician and earned $30,000 but is not covered under a qualified retirement plan.They file a joint return;have interest and dividend income of $25,000.What is the maximum amount of tax deductible contributions may be made to a traditional IRA?

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Quizplus · Accepted Answer

Based on the information provided in the question, Tucker is covered under a qualified retirement plan at his job, which means that the tax deductible contribution limit to a traditional IRA for him is reduced. In 2016, the limit is $5,500 for individuals under age 50 who are covered by a retirement plan at work and have modified adjusted gross income (MAGI) between $98,000 and $118,000. Since Tucker's MAGI is higher than $118,000, he is not eligible for any tax deductible contributions to a traditional IRA.
On the other hand, since Elizabeth is not covered by a retirement plan at work, she can make a tax deductible contribution to a traditional IRA up to the limit of $5,500, assuming their joint MAGI is less than $184,000.
Therefore, the maximum amount of tax deductible contributions that can be made to a traditional IRA for this couple is $5,500.

Tucker (Age 52)and Elizabeth (Age 48)are a Married Couple