Question

Tomas, aged 29, is married, filing jointly, and is not an active participant in a qualified plan. However, his wife, Cindy, is an active participant in a qualified retirement plan. Tomas' compensation is $65,000 and the couple's AGI is $154,000 in 2018.

Click here to access Exhibit 11.3. Do not round intermediate computations. If an amount is zero, enter "0".

a. Tomas can contribute $ to his traditional IRA, and he can deduct $. His wife Cindy can make a
$ deductible IRA contribution.

b. Assume instead that Tomas is a participant in a SIMPLE IRA and that he elects to contribute 4% of his compensation to the account, while his employer contributes 3%.

Tomas will contribute $ to his SIMPLE IRA account. His employer will contribute $. The amount that will vest immediately is $.

Answer 1

a. Tomas can contribute $ 5,500 to his traditional IRA, and he can deduct $ 5,500. His wife Cindy can make a
$ 0 deductible IRA contribution.

The annual contribution limit is $ 5,500

b. Assume instead that Tomas is a participant in a SIMPLE IRA and that he elects to contribute 4% of his compensation to the account, while his employer contributes 3%.

Tomas will contribute $ 2,600 to his SIMPLE IRA account. His employer will contribute $ 1,950. The amount that will vest immediately is $ 4,550.

His employer will contribution = $ 65000 x 3% = $ 1,950.

Tomas Contribution = $ 65,000 x 4% = $ 2,600