Chi is single and an employee of Federal Company.Chi's adjusted gross income for the current year is $63,000.Chi would like to make the maximum contribution to his individual retirement account this year.Which of the following statements about Chi's contribution and deduction amounts is (are)true?
I.He is not allowed to make an IRA contribution because his adjusted gross income is greater than $62,000.
II.If Federal Company does not have a qualified pension plan;Chi can contribute and deduct a maximum of $5,500 to his IRA account.

Question

Chi is single and an employee of Federal Company.Chi's adjusted gross income for the current year is $63,000.Chi would like to make the maximum contribution to his individual retirement account this year.Which of the following statements about Chi's contribution and deduction amounts is (are)true?
I.He is not allowed to make an IRA contribution because his adjusted gross income is greater than $62,000.
II.If Federal Company does not have a qualified pension plan;Chi can contribute and deduct a maximum of $5,500 to his IRA account.
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Quizplus · Accepted Answer

Statement I is incorrect. Chi can make an IRA contribution even if his adjusted gross income is greater than $62,000, but his contribution may not be fully tax deductible depending on his specific circumstances. 
Statement II is correct. If Federal Company does not have a qualified pension plan, Chi can contribute and deduct a maximum of $5,500 to his IRA account. However, if Federal Company does have a pension plan, the deductibility of Chi's contribution may be limited or eliminated based on his income levels.

Chi Is Single and an Employee of Federal Company