Chi is single and an employee of Federal Company. Chi's adjusted gross income for the current year is $64,000. 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 $63,000.
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 $64,000. 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 $63,000.
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 as Chi may make an IRA contribution even if his adjusted gross income is over $63,000. However, if he is not covered by a qualified pension plan at work, he can deduct the full contribution amount of $5,500. Therefore, statement II is correct.

Chi Is Single and an Employee of Federal Company