Realizing that providing for a comfortable retirement is up to them, Jim and Julie commit to making regular contributions to their IRAs, beginning this year.Consequently, they each make a $2,000 contribution to their traditional IRA.If their AGI is $35,000 on their joint return, what is the amount of their credit for certain retirement plan contributions?
A)$800.
B)$600.
C)$400.
D)$200.
E)None of the above.

Question

Quizplus · Accepted Answer

The saver's credit is a tax credit for low- and moderate-income taxpayers who contribute to a retirement plan. The credit is equal to 10% of the amount contributed, up to a maximum of $1,000 for single filers and $2,000 for married couples filing jointly. Jim and Julie's AGI is $35,000, which is below the income limit for the saver's credit. They each contributed $2,000 to their traditional IRAs, so they are eligible for the maximum credit of $2,000.

Realizing That Providing for a Comfortable Retirement Is Up to Them