Concerning individual retirement accounts (IRAs),
I.A single taxpayer that is an active participant in a qualified plan and has adjusted gross income of $64,000 may contribute and deduct up to $5,500 of the annual contribution.
II.A taxpayer who is not an active participant and whose spouse does not work may contribute $11,000 into two separate IRAs but can only deduct $5,500 for AGI.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Concerning individual retirement accounts (IRAs),
I.A single taxpayer that is an active participant in a qualified plan and has adjusted gross income of $64,000 may contribute and deduct up to $5,500 of the annual contribution.
II.A taxpayer who is not an active participant and whose spouse does not work may contribute $11,000 into two separate IRAs but can only deduct $5,500 for AGI.​
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Statement I is incorrect because the deduction limit for a single taxpayer who is an active participant in a qualified plan phases out at an adjusted gross income between $64,000 and $74,000 (as of 2023), so they may not be able to deduct the full $5,500. Statement II is incorrect because a taxpayer who is not an active participant and whose spouse does not work can contribute $11,000 into two IRAs and potentially deduct the full amount, subject to other IRS rules and limits.

Concerning Individual Retirement Accounts (IRAs)