In 2018, Madison is a single taxpayer who is 25 years of age. During 2018, she...

In 2018, Madison is a single taxpayer who is 25 years of age. During 2018, she contributed $3,000 to her employer sponsored 401(k) account. Her 2018 AGI was $67,500 (before considering IRA deductions). What is the maximum deductible contribution, if any, that Madison can make her to IRA?

Solutions

Expert Solution

Solution:

Here's the easy part. The 2018 IRA contribution limit is $5,500, the same as it was last year. In fact, the last time the limit was increased was in 2013, when it grew by $500 to the current level.

Madison a solitary citizen of age 25 years. Amid 2018, she contributed $3,000 to her boss supported 401(K) account. For the duty year 2018, citizen can contribute up to $18,000 on the off chance that he/she is less, 49 years in age and an extra aggregate of $6,000 if the citizen age 50 or more established.

Additionally, commitments to boss supported plans, as 401(k) should be included for the computation of changed balanced gross salary.

Presently, coming to IRA conclusion the most extreme conceivable reasoning a citizen can take in assessment year 2018 is $5,500 on the off chance that he/she is upto 50 years, though finding is permitted just when the altered balanced gross salary (MAGI) of a solitary citizen not surpassing 50 years old is between $62,000 - $72,000.

On the off chance that the MAGI surpasses $72,000 the individual won't be qualified for IRA derivation.

In this way, here Madison is a solitary citizen of 25 years old and AGI $67,500 (Before considering IRA derivation which is equivalent to MAGI) is qualified to deductible commitment in IRA for a greatest measure of $5,500 thinking about the above conditions.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Becky, 25 years old, is a single taxpayer who uses the standard deduction. Her AGI is...

Becky, 25 years old, is a single taxpayer who uses the standard deduction. Her AGI is $61,000. After she finished her accounting degree at Minnesota, she decided to enroll in a local community college to take one class in art history as a part time student. The cost of the course was $1500. Compute the amount of education tax credits available to her in 2020 and specify the name of the tax credit that she is eligible for.

-Kathy is 60 years of age and self-employed. During 2018 she reported $100,000 of revenues and...

-Kathy is 60 years of age and self-employed. During 2018 she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to a simplified employee pension (SEP) IRA for 2018? (Round your final answer to the nearest whole number) A) $11,152. B) $17,152. C) $12,000 D) $55,000. -Kathy is 60 years of age and self-employed. During 2018 she reported...

Kathy is 48 years of age and self-employed. During 2018 she reported $110,000 of revenues and...

Kathy is 48 years of age and self-employed. During 2018 she reported $110,000 of revenues and $44,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to a simplified employee pension (SEP) IRA for 2018? (Round your final answer to the nearest whole number) Multiple Choice $12,267. $17,157. $61,500. $55,000.

Alternative Minimum Tax for Individuals Alex (age 35) is a single taxpayer with no dependents. During...

Alternative Minimum Tax for Individuals Alex (age 35) is a single taxpayer with no dependents. During 2018, Alex earned a salary of $610,000. He also had the following income and expenses: Interest from State of New Hampshire bonds (private activity bond) $63,700 Interest from Primco corporate bonds $26,000 Medical Expenses (all expenses were unreimbursed) $79,500 Home mortgage interest $13,500 (the face value of the mortgage loan was $670,000) State Income Taxes $7,200 ...

On January 1, 2020, Claudia, a single taxpayer who was age 67 at the time, began...

On January 1, 2020, Claudia, a single taxpayer who was age 67 at the time, began receiving monthly retirement benefits from her former employer's pension plan. Claudia did not receive any distributions before the annuity start date, and her investment in the plan is $35,000. There is no survivor beneficiary. I f Claudia receives a monthly benefit of $1,200, what amount will she recover tax-free in 2020?

Pedro, who is a single taxpayer, had AGI of $328,000 for 2018. He incurred the following...

Pedro, who is a single taxpayer, had AGI of $328,000 for 2018. He incurred the following expenses during the year: Medical expenses before 10%-of-AGI limitation $12,000 State and local income taxes 8,900 Real estate taxes 1,600 Home mortgage interest 16,000 Charitable contributions 2,200 Deductible investment interest expense 1,700 Compute the amount of Pedro’s itemized deductions after any applicable reductions.

You have a tax client who is a single taxpayer and has one child, age 3....

You have a tax client who is a single taxpayer and has one child, age 3. Your client plans on sending to the child to private elementary, middle, and high school. He also plans on paying as much as he can for the child’s college education. Provide a paragraph explanation, directed to your client, advising him on information related to a Section 529 account. Use specific numerical examples in your explanation.

Maya Chang, age 35, is a single taxpayer who lives at 1225 Primrose Lane, Austin, Texas,...

Maya Chang, age 35, is a single taxpayer who lives at 1225 Primrose Lane, Austin, Texas, 93221. Her social security number is 365-87-2012. Maya is the manager of a spa and her earnings and withholdings for 2016 are: W-2 Wages $105,000 Federal Taxes Withheld $20,000 State Taxes Withheld $0 (Texas has no income taxes) Maya owns a single family home as a rental property at 2012 Boulder Drive, Hutto, Texas, 93110. The house is rented for the entire year at...

please calculate the 2020 tax liability for a single taxpayer who is 40 years old with...

please calculate the 2020 tax liability for a single taxpayer who is 40 years old with $212,400 of wages, $20,000 of qualified dividends, $30,000 of LT capital gains and $50,000 of ST capital gains. Please make sure to consider all possible taxes in your calculation, please show all work/ calculations

Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next...

Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next year to be $250,000, of which $200,000 is attributed to her sole proprietorship. Moana is contemplating incorporating her sole proprietorship. (Use the tax rate schedule). a. Using the single individual tax brackets and the corporate tax rate of 21 percent, find out how much current tax this strategy could save Moana (ignore any Social Security, Medicare, or self-employment tax issues).

Subjects