During 2020, Jacob, a 19-year-old full-time student, earned $4,500 during the year and was not eligible to participate in an employer-sponsored retirement plan. The general limit for deductible contributions to an IRA during 2020 is $6,000. How much of a tax-deductible contribution can Jacob make to an IRA?
A)$0 (Full-time students are not allowed to participate in IRAs).
B)$1,500.
C)$4,500.
D)$6,000.

Question

Quizplus · Accepted Answer

Jacob can contribute up to the lesser of his earned income or the general limit for deductible contributions to an IRA, which in 2020 was $6,000. Since he earned $4,500, that is the maximum deductible contribution he can make. Full-time student status does not affect eligibility for IRA contributions.

During 2020, Jacob, a 19-Year-Old Full-Time Student, Earned $4,500 During