Question

In 2017, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations:

A. Susan’s salary and the couple’s AGI is $190,000. The couple files a joint tax return.
b. Susan’s salary and the couple’s AGI is $120,000. The couple files a joint tax return.
c. Susan’s salary and the couple’s AGI is $80,000. The couple files a joint tax return.
d. Susan’s salary and her AGI is $80,000. Dan reports $5,000 of AGI (earned income). The couple files separate tax returns.

Answer 1

Answer

Conditions:

A.

Susan’s salary and the couple’s AGI is $190,000.The couple files a joint tax return.

Can each contribute 5500

1)Susan cannot deduct.

2)dans deduction is 190,000- 186,000 = 4000/10000=40% non deductible

5500 x 60% = 3300

(dans threshold is 196,000 – 186,000)

B.

Susan’s salary and the couple’s AGI is $120,000. The couple files a joint tax return.

AGI less then $186000, then Maximum deductible IRA contribution is $5500

C.

Susan’s salary and the couple’s AGI is $80,000. The couple files a joint tax return.

AGI less then $186000, then Maximum deductible IRA contribution is $5500

D.

if filling separately AGI should be less then $10000 so susan IRA will be $0

In case of Dan AGI is below $10000 and it is 50% of maximum. so 50 % has to be phased out IRA allowed

$5500*50%= $2750