During 2014 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 during 2014 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

Jacob can contribute up to the amount of his earned income, which is $4,500, to an IRA. The general limit is $5,500, but since his earned income is less than that, he can only contribute up to $4,500.

During 2014 Jacob, a 19 Year Old Full-Time Student, Earned