Question 1

Deborah (single, age 29)earned $25,000 in 2019. Deborah was able to contribute $1,800 ($150/month)to her employer-sponsored 401(k). What is the total saver's credit that Deborah can claim for 2019? Use Exhibit 13-8.

Accepted Answer

The answer of Deborah (single, age 29)earned $25,000 in 2019....

Question 2

Carmello and Leslie (ages 34 and 35, respectively)are married and want to contribute to a Roth IRA. In 2019, their AGI totaled $42,000 before any IRA-related transactions. Of the $42,000, Carmello earned $35,000 and Leslie earned $7,000. How much can each spouse contribute to a Roth IRA if they file jointly? How much can each spouse contribute to a Roth IRA if they file separately?

Accepted Answer

The answer of Carmello and Leslie (ages 34 and 35,...

Question 3

Ryan, age 48, received an $8,000 distribution from his traditional IRA to pay for medical expenses. Ryan has made only deductible contributions to the IRA and his marginal tax rate is 28 percent. What amount of taxes and early distribution penalties will Ryan be required to pay on the distribution?

Accepted Answer

The answer of Ryan, age 48, received an $8,000 distribution...

Question 4

Scott and his wife, Leanne (ages 39 and 37, respectively), earned $50,000 in 2019. Scott was able to contribute $2,400 ($200/month)to his employer-sponsored 401(k). What amount of saver's credit can Scott and Leanne claim in 2019?

Accepted Answer

The answer of Scott and his wife, Leanne (ages 39...

Question 5

In 2019, Madison is a single taxpayer who is 25 years of age. During 2019, she contributed $3,000 to her employer-sponsored 401(k)account. Her 2019 AGI was $68,500 (before considering IRA deductions). What is the maximum deductible contribution, if any, that Madison can make to her IRA?

Accepted Answer

The answer of In 2019, Madison is a single taxpayer...

Question 6

Tatia, age 38, has made deductible contributions to her traditional IRA over the past few years. When her account balance was $30,000, she received a distribution of the entire $30,000 balance of her traditional IRA. She retained $5,000 of the distribution to help her pay the taxes due from the distribution and she immediately contributed the remaining $25,000 to a Roth IRA. What amount of tax and early distribution penalty is she required to pay on the $30,000 distribution from the traditional IRA if her marginal tax rate is 25 percent?

Accepted Answer

The answer of Tatia, age 38, has made deductible contributions...

Question 7

Aiko (single, age 29)earned $40,000 in 2019. He was able to contribute $1,800 ($150/month)to his employer-sponsored 401(k). What is the total saver's credit that Aiko can claim for 2019? Exhibit 13-8

Accepted Answer

The answer of Aiko (single, age 29)earned $40,000 in 2019....

Question 8

Yvette is a 44-year-old self-employed contractor (no employees). During 2019, her Schedule C net income was $500,000. Assume Yvette has no contributions to other retirement plans. What is the maximum amount that Yvette can contribute to (1)a SEP IRA and (2)an individual 401(k)? (Round your answers to the nearest whole number.)

Accepted Answer

The answer of Yvette is a 44-year-old self-employed contractor (no...

Question 9

Cassandra, age 33, has made deductible contributions to her traditional IRA over the years. When the balance in her IRA was $40,000, Cassandra received a distribution of $34,000 from her IRA in order to purchase a new car. How much of the $34,000 distribution will she have remaining after paying income taxes and early distribution penalties on the distribution? Her marginal tax rate is 25 percent.

Accepted Answer

The answer of Cassandra, age 33, has made deductible contributions...

Question 10

Gordon is a 52-year-old self-employed contractor (no employees). During 2019, his Schedule C net income was $88,000. What is the maximum amount that Gordon can contribute to (1)a SEP IRA and (2)an individual 401(k)? (Round your answers to the nearest whole number.)

Accepted Answer

The answer of Gordon is a 52-year-old self-employed contractor (no...

Question 11

Tatia, age 38, has made deductible contributions to her traditional IRA over the past few years. When her account balance was $32,000, she transferred the entire $32,000 out of her traditional IRA and immediately into a Roth IRA. Her current marginal tax rate is 25 percent. What amount of tax and penalty is she required to pay on this rollover?

Accepted Answer