Tucker (age 52)and Elizabeth (age 48)are a married couple.Tucker is covered under a qualified retirement plan at his job and earned $90,000 in 2014.Elizabeth is employed as a lab technician and earned $30,000 but is not covered under a qualified retirement plan.They file a joint return; have interest and dividend income of $25,000.What is the maximum amount of tax deductible contributions may be made to a traditional IRA?

Question

Quizplus · Accepted Answer

Since Tucker is covered under a qualified retirement plan at his job, the deduction for traditional IRA contributions is subject to income limits. For the 2014 tax year, the income limit for a married couple filing jointly is $96,000. Since Tucker earned $90,000, they are under the income limit. However, since Elizabeth is not covered by a qualified retirement plan at work, there is no income limit for her. Thus, they can each make a tax-deductible contribution of up to $5,500 ($6,500 if they are both over age 50) for a total of $11,000 into traditional IRAs. So, the correct answer is option (C) $5,500.

Tucker (Age 52)and Elizabeth (Age 48)are a Married Couple