Question

The taxpayer covered by an employer retirement plan in 2018 who may qualify for a full deduction of their traditional IRA contribution is

1) Kelli, who files single with modified AGI of $64,000

2) Mark, who files head of household with modified AGI of $65,000

3) Samantha, who is filing a joint return as a surviving spouse with modified AGI of $96,000

4) Donald, who is married, filing a joint return with modified AGI of $101,500

Answer 1

IRAs stands for Individual Retirement Arrangements.

An individual planning his retirement can make contributions under Traditional IRAs scheme which are eligible for deductions under Income Tax.

Deductions under Traditional IRAs plans vary on the basis of whether the individual is covered by a retirement plan at work or not.

A tabular representation of the 2018 IRA Contribution Deductions if the individual is covered by a retirement plan at work, is given below.

Table A

Filing Status	Modified AGI	Deduction Limit
single or head of household	up to $63,000	Full deduction on the eligible contribution amount
	more than $63,000 but less than $73,000	Partial Deduction
	$73,000 or more	Nil

Table B

Filing Status	Modified AGI	Deduction Limit
married filing jointly or qualifying widow/er	up to $101,000	Full deduction on the eligible contribution amount
	more than $101,000 but less than $121,000	Partial Deduction
	$121,000 or more	Nil

Table C

Filing Status	Modified AGI	Deduction Limit
married filing seperately	up to $10,000	Partial Deduction
	$10,000 or more	Nil

With reference to the above provisions, let us now compare each of the case given in the question -

1. Kelli files a single return with modified AGI of $64,000 will be eligible only for a partial deduction since her AGI exceeds $63,000 - See Table A, single or head of household

2. Mark files a head of household return with modified AGI of $65,000 will be eligible only for a partial deduction since his AGI exceeds $63,000 - See Table A, single or head of household

3. Samantha files a joint return as a surviving spouse with modified AGI of $96,000 will be eligible for full deduction on the eligible contribution amount to her traditional IRA since her AGI does not exceeds $101,000 - See Table B, married filing jointly or qualifying widow/er.

4. Donald, who is married files a joint return with modified AGI of $101,500 will be eligible only for a partial deduction since his modified AGI is more than $101,000 but less than $121,000 -  See Table B, married filing jointly or qualifying widow/er.

Conclusion - Only Samantha will be eligible for a full deduction of their traditional IRA Contribution