Paulette is age 32,single,and reported AGI of $67,000 in tax year 2016.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2016?

Question

Quizplus · Accepted Answer

Paulette's ability to deduct her traditional IRA contribution is limited by her participation in her employer's retirement plan and her income level. In 2016, if her income is between $61,000 and $71,000 and she is an active participant in the employer's plan, the limit on her deductible contribution would be $3,350. Since Paulette's income is above $61,000, but below $71,000, the amount of her contribution that is not deductible is $3,350 - ($67,000 - $61,000)/2 = $3,300. Therefore, choice C is correct.

Paulette Is Age 32,single,and Reported AGI of $67,000 in Tax