During 2018, 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 2018 is $5,500. 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) $500.
C) $4,500.
D) $5,500.

Question

Quizplus · Accepted Answer

Tax deductible contributions are limited to the lesser of $5,500 or the amount of earned income.

During 2018, Jacob, a 19 Year Old Full-Time Student, Earned