Question

Scott, age 39, is single and earns $66,000 annually. He participates in his employer’s retirement plan. Which of the following describes his ability to establish a Traditional IRA and the tax treatment of his contribution for 2017?

1- Scott can make a $5,500 tax deductible contribution to a Traditional IRA

2- Scott can make a $4,400 tax deductible contribution to a Traditional IRA

3- Scott can make a $3,300 tax deductible contribution to a Traditional IRA

4- Scott is not eligible to establish a Traditional IRA, so no deductible contribution can be made

please, can u give me jsut final answer

Answer 1

Answer is option 1

1- Scott can make a $5,500 tax deductible contribution to a Traditional IRA

The annual contribution limit for 2015, 2016, 2017 and 2018 is $5,500, or $6,500 if you're age 50 or older. Employees participating in employer- sponsored plan are eligible if income is below:

->$70,000 (individual, not married)

Here, Scott is below 50 years age plus his annual salary is below $70000 and he is single.

So first option appropriately applies to him.