Question

In: Accounting

Harriet and Harry Combs (both 37 years old) are married and both want to contribute to...

Harriet and Harry Combs (both 37 years old) are married and both want to contribute to a Roth IRA. In 2019, their AGI before any IRA contributions deductions is $50,000. Harriet earned $46,000 and Harry earned $4,000.

a. How much can Harriet contribute to her Roth IRA if they file a joint return?

b. How much can Harriet contribute if she files a separate return?

c. How much can Harry contribute to his Roth IRA if they file separately?

Solutions

Expert Solution

Step-1
Married person filed jointly in Roth IRA: If a person is active participant, deduction for non-active participant is calculated by phase-out from their income limit of $184,000 to $194,000. The contribution is same for each participant and deduction of the contribution varies with their income level.
Married person filed separately in Roth IRA: If a person is active participant, deduction for non-active participant is calculated by phase-out from their income limit of $0 to $10,000.
Step-2
In this present case, Ht and Hy are married both having age of 37 years. Their AGI is $50,000 in which earned income of Ht and Hy $46,000 and $4,000 respectively.
a.
Ht wants to contribute in Roth IRA plan and want to file it jointly with his wife. When the couple is filing jointly, the limitation of contribution is $5,500 for taxpayer below the age of 50 or earned income whichever is less.
As age of Ht was below 50 years and their earned income is $50,000. Therefore, $5,500 is the maximum contribution amount of Ht in Roth IRAplan.
Hence, $5,500 is the maximum contribution amount of Ht in Roth IRA plan. There will no phase out for the contribution because their AGI is lesser than $184,000 while filing it jointly.
Step-3
b.
Ht wants to contribute on Roth IRA plan and want file it separately. When the couple is filing separately, the limitation of contribution is $5,500 for taxpayer below the age of 50 or earned income whichever is less.
As Ht was below 50 years and their earned income is $50,000. Therefore, there is a situation of full phase out which means no contribution will be made as their AGI is above $10,000.
Step-4
Hence, there is no contribution of Ht in Roth IRA plan.
Step-5
c.
Hy wants to contribute in Roth IRA plan and want file it separately. When the couple is filing separately, the limitation of contribution is $5,500 for taxpayer below the age of 50 or earned income whichever is less.
As Hy was below 50 years and their earned income is $50,000. Therefore, there is a situation of full phase out which means no contribution will be made as their AGI is above $10,000.
Hence, there is no contribution of Hy in Roth IRA plan.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a...
Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley. In 2017, their AGI is $192,200. Jackson and Ashley each earned half of the income. a. How much can Ashley contribute to her Roth IRA if they file a joint return? b. How much can Ashley contribute if she files a separate return? c. Assume that Ashley earned all of the couple’s income and that she contributed the maximum amount...
a)Jackson and Ashley turner (both 45 years old) are married and want to contribute to a...
a)Jackson and Ashley turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley in 2019 their AGI is $198,000 Jackson and Ashley each earned half of the income how much can actually contribute to her Roth Aire if they file a joint return? b) John (age 51 and single) has earned income of $2500 he has $30,000 of unlearned (capital gain) income if he does not participate in an employer sponsored plan what...
Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a...
Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley. In 2018, their AGI is $193,800. Jackson and Ashley each earned half of the income. a.) How much can Ashley contribute to her Roth IRA if they file a joint return? b.) How much can Ashley contribute if she files a separate return? c.) Assume that Ashley earned all of the couple’s income and that she contributed the maximum amount...
Mr and Mrs Smith are married and they are both 45 years old and in good...
Mr and Mrs Smith are married and they are both 45 years old and in good health. Mr Smith has $10million of assets in his name while Mrs Smith has $6MM of assets in her name. Both Mom and Dad hold stock in Amazon, Facebook , Ford and JPM and these stocks constiute their wealth. Neither Mr or Mrs Smith have ever worked and all of their wealth comes from inheritance from past generations. The couple has three children and...
Warner and Augustine Robins, both 33 years old, have been married for 9 years and have...
Warner and Augustine Robins, both 33 years old, have been married for 9 years and have no dependents. Warner is the president of Dragon Lady Corporation located in Macon. The Dragon Lady stock is owned 40 percent by Warner, 40 percent by Augustine, and 20 percent by Warner’s father. Warner and Augustine received the following tax documents: 1) W-2 Form 2) Form 1099-INT 3) Form 1098 4) Letter from Macon Museum of Arts regarding their charitable contribution. These items are...
Marvin Combs is 43 years old and is employed by a Canadian public company. His annual...
Marvin Combs is 43 years old and is employed by a Canadian public company. His annual salary is $82,468, none of which is commissions. Because of his outstanding work during 2017, he has been awarded a $20,000 bonus in 2017 that was paid on December 15, 2017. For 2017, his employer withheld the following: EI premiums                                        $836 CPP contributions                               $2,564 Federal Income Tax                           $26,000 Professional association dues           $3,400 Registered pension plan (RPP)        $6,800 Other Information:...
Calvin Albright is 69 years old and married. He and his wife, Betty, are both U.S....
Calvin Albright is 69 years old and married. He and his wife, Betty, are both U.S. citizens with valid Social Security numbers. Calvin retired in 2015. He received $7,000 in Social Security payments in 2017. Betty, who is 60 years old, was unemployed for four months of 2017, but started a new job and received full health insurance coverage from her employer for the remaining 8 months. Betty received unemployment compensation and wages totaling $30,000 for 2017. Betty did not...
Kimberly has recently married Dean. Both taxpayers are 23 years old. They have one dependent child,...
Kimberly has recently married Dean. Both taxpayers are 23 years old. They have one dependent child, Amber age 3. Kimberly’s W-2 $5,000 Dean’s W-2 $7,000 Kimberly’s unemployment compensation $8,000 Dean’s unemployment compensation $9,000 What is their tax liability and tax credits? What is the maximum earned income credit a family (MFJ) with one child can receive?
Extracellular fluid volume deficit Harriet 30 years old, has been admitted to the burn treatment center...
Extracellular fluid volume deficit Harriet 30 years old, has been admitted to the burn treatment center with a full thickness burns over 30% of her upper body.Her diagnosis is consistent with extracellular fluid volume deficit(FVD). 1.What symptom would indicate to the nurse that the patient may be experiencing an FVD ? 2.what should the nursing plan of care for harried include that would indicate to the nurse that there may be an FVD . 3.what intervention provided by the nurse...
Bob is 37 years old and is an account manager with a large telecom company. He’s...
Bob is 37 years old and is an account manager with a large telecom company. He’s been dragging his feet with his retirement plan, opting instead for expensive trips to Vegas and Aspen. He’s decided it’s time to get serious about saving for his retirement. He plans to retire at age 67 and travel the world. Because of this plan, he figures he needs approximately $70,000/year in retirement. His grandfather lived until he was 86 and his dad is in...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT