Mr.M has earned income of $125,000 in the current year and is a participant in his employer's qualified retirement plan.Mrs.M is a housewife and has no earned income.During 2011, the Ms may make total deductible contributions to their IRAs of

Question

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Since Mr.M is covered by a qualified employer retirement plan, the contribution limit for a deductible traditional IRA for him is $6,000. Since Mrs.M has no earned income, she is limited to a spousal IRA contribution of $5,000. Therefore, the total deductible contribution they may make to their IRAs is $6,000 + $5,000 = $11,000. However, the maximum deductible amount for their income level is $10,000. Therefore, the best choice is for the Ms to make a total deductible contribution of $5,000 each to their IRAs, for a total of $10,000.

MrM Has Earned Income of $125,000 in the Current Year