During 2016,Marcia,who is single and is covered under a pension plan at work,contributes $5,500 into a Roth IRA.If her AGI is $65,000,which of the following is true?
A)All of the contribution is deductible.
B)None of the contribution is deductible.
C)She must withdraw all of the contribution immediately since she is covered under a plan at work.
D)Only 60% of the contribution is deductible since her AGI exceeds $61,000 by $4,000 and her maximum contribution is phased out by 40%.

Question

Quizplus · Accepted Answer

Since Marcia is covered under a pension plan at work and her AGI is $65,000, none of her contribution to the Roth IRA is deductible. The ability to deduct contributions to a traditional IRA is phased out for individuals who are covered under a workplace retirement plan and whose AGI exceeds certain limits, but this does not affect contributions to a Roth IRA.

During 2016,Marcia,who Is Single and Is Covered Under a Pension