Darlene and Devin are married. Darlene earns $48,000 and Devin earns $41,000. Their adjusted gross income is $97,000. Darlene's employer provides her with a qualified pension plan, Devin's does not. What are Darlene and Devin's maximum combined IRA contribution and deduction amounts?

Contribution Deduction

Question

Darlene and Devin are married. Darlene earns $48,000 and Devin earns $41,000. Their adjusted gross income is $97,000. Darlene's employer provides her with a qualified pension plan, Devin's does not. What are Darlene and Devin's maximum combined IRA contribution and deduction amounts?
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Contribution Deduction

Quizplus · Accepted Answer

For the tax year 2023, individuals under the age of 50 can contribute up to $6,000 to an IRA. Since both Darlene and Devin are eligible to contribute to an IRA, their maximum combined contribution is $6,000 each, totaling $11,000. The deduction amount they can take for their contributions depends on their filing status and income since Darlene is covered by a retirement plan at work. However, because their combined adjusted gross income is $97,000, they fall within the phase-out range for married couples filing jointly where one spouse is covered by a workplace retirement plan. In 2023, this phase-out range starts at $109,000, meaning they can fully deduct their IRA contributions because they are below this threshold. Therefore, their maximum deduction is also $11,000, matching their contribution.

Darlene and Devin Are Married