Fred and Irma are married with salaries of $49,000 and $44,000,respectively.Their combined AGI is $109,000.Both are active participant in their companies' qualified pension plans.Determine their maximum combined IRA contribution and deduction amounts?

Maximum Maximum
Contribution Deduction

Question

Fred and Irma are married with salaries of $49,000 and $44,000,respectively.Their combined AGI is $109,000.Both are active participant in their companies' qualified pension plans.Determine their maximum combined IRA contribution and deduction amounts?
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Maximum Maximum
Contribution Deduction

Quizplus · Accepted Answer

The maximum IRA contribution and deduction for each person is $6,000 since they are both under age 50 in 2021. However, since they are both active participants in a company pension plan, their deductions will be limited based on their income.

Using the IRS worksheet, their combined maximum deduction is $11,000. So they can each contribute $6,000 to their IRA, for a total IRA contribution of $12,000, but they can only deduct a combined total of $11,000. Therefore, the best choice is C, which shows a maximum combined IRA contribution of $11,000 and a maximum deduction of $5,500 for each spouse.

Fred and Irma Are Married with Salaries of $49,000 and $44,000,respectively.Their