Margie is single and is an employee of the Stitch Corporation. She is an active participant in the company's pension plan. Margie's adjusted gross income is $67,000 and she contributes the maximum amount allowable as a deduction to her regular IRA account during the current year. How much can Margie contribute to her Roth IRA?

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The Roth IRA contribution limit for 2020 is $6,000, or $7,000 for those age 50 or older. However, the amount that Margie can contribute is reduced based on her income. Since Margie's adjusted gross income is $67,000 (which is within the phase-out range for a single individual), she can only contribute a reduced amount to her Roth IRA. The formula for calculating the reduced contribution amount is (MAGI - $124,000) ÷ $15,000. Plugging in Margie's MAGI results in a reduction of $2,200. Therefore, Margie can contribute $6,000 - $2,200 = $3,800 to her Roth IRA.

Margie Is Single and Is an Employee of the Stitch