Cisco and Carmen are both in their 30's and are married.Carmen earns $69,000 and Cisco earns $28,000.Their adjusted gross income is $105,000.Carmen is an active participant in her company's pension plan.Cisco's employer does not have a pension plan.What are Carmen and Cisco's maximum combined IRA contribution and deduction amounts?
Contribution Deduction
A)$-0- $-0-
B)$11,000 $5,500
C)$11,000 $9,350
D)$11,000 $11,000

Question

Quizplus · Accepted Answer

For 2021, the maximum contribution to a Traditional IRA for individuals under the age of 50 is $6,000. However, because Carmen is an active participant in her company's pension plan, there are income limits that affect her ability to deduct her contributions. For married couples filing jointly where one spouse is an active participant in a pension plan and the other is not, the income limit for deducting contributions is $105,000 to $125,000. In this case, they fall within that range, so their maximum combined deduction amount is $9,350 ($6,000 for Carmen and $3,350 for Cisco).

Cisco and Carmen Are Both in Their 30's and Are