Donald, a 40-year-old married taxpayer, has a salary of $55,000 and interest income of $6,000. What is the maximum amount Donald can contribute to a Roth IRA?

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Quizplus · Accepted Answer

The maximum contribution limit for a Roth IRA in 2021 is $6,000 or $7,000 if the taxpayer is over 50 years old. However, contribution limits are reduced for higher-income earners. For someone filing as married filing jointly with a modified adjusted gross income (MAGI) of $198,000 or less, the maximum contribution limit is $6,000. For someone with MAGI between $198,000 and $208,000, the contribution limit is gradually reduced. Since Donald's income falls below the phase-out range, he can contribute the full amount of $6,000.

Donald, a 40-Year-Old Married Taxpayer, Has a Salary of $55,000