Kevin, single, is an employee of the Colonial Company and is an active participant in its pension plan. Kevin's adjusted gross income for the current year is $62,000. Kevin contributes $1,000 to his conventional individual retirement account. Which of the following statements about Kevin contributions and deduction amounts is (are) true?
I.He is allowed to deduct his $1,000 contribution to his conventional IRA.
II.Kevin can also contribute but not deduct $4,500 to his Roth IRA.

Question

Kevin, single, is an employee of the Colonial Company and is an active participant in its pension plan. Kevin's adjusted gross income for the current year is $62,000. Kevin contributes $1,000 to his conventional individual retirement account. Which of the following statements about Kevin contributions and deduction amounts is (are) true?
I.He is allowed to deduct his $1,000 contribution to his conventional IRA.
II.Kevin can also contribute but not deduct $4,500 to his Roth IRA.
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Quizplus · Accepted Answer

Both statements are correct. Kevin can deduct his $1,000 contribution to his conventional IRA because he is within the income limits for single filers to deduct IRA contributions. Additionally, Kevin can contribute to a Roth IRA, but those contributions are not deductible. The income limit for Roth IRA contributions for single filers is higher than Kevin's adjusted gross income, allowing him to contribute but not deduct contributions to a Roth IRA.

Kevin, Single, Is an Employee of the Colonial Company and Is