Ms. Knox, age 34 and single, has $129,800 AGI, $108,200 of which is compensation income. Compute her maximum contribution to her Roth IRA.

Question

Quizplus · Accepted Answer

Ms. Knox is over age 50, so she can make a catch-up contribution of $1,000 to her Roth IRA. Her maximum contribution is $6,000 ($5,000 regular contribution + $1,000 catch-up contribution). However, her AGI is over the phase-out limit for Roth IRA contributions, so her maximum contribution is reduced by $3,678. Therefore, her maximum contribution is $6,000 - $3,678 = $2,322.

Ms Knox, Age 34 and Single, Has $129,800 AGI, $108,200