Question

Norman Stonewell reports a salary of $80,000 this year on a joint return. He also reports $8,000 in royalty income from two books he wrote. Norman is age 48, and his wife Betty is 50.

a. Is Norman eligible to maintain both a traditional IRA and a Keogh plan?

b. If Betty in a nonworking spouse, what is the maximum traditional IRA contribution allowable?

c. When must the traditional IRA account be opened and the contribution made?

d. What are the maximum contribution and deduction amounts available to Norman if he maintains a profit-sharing Keogh plan?

e. When must the Keogh plan be opened and the contribution made?

Answer 1