Question

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In 2020, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations. (Leave no answer blank. Enter zero if applicable.)

d. Susan’s salary and her AGI are $83,000. Dan reports $6,200 of AGI (earned income). The couple files separate tax returns.

       

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This year Jack intends to file a married-joint return. Jack received $180,400 of salary and paid $5,350 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $8,150 and $34,200 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

a. What is Jack's adjusted gross income?

[The following information applies to the questions displayed below.]

In 2020, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations. (Leave no answer blank. Enter zero if applicable.)

c. Susan’s salary and the couple’s AGI are $83,000. The couple files a joint tax return.
     

       

Required information

[The following information applies to the questions displayed below.]

In 2020, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations. (Leave no answer blank. Enter zero if applicable.)

b. Susan’s salary and the couple’s AGI are $131,000. The couple files a joint tax return.

   

Answer 1

1.) (d)

As per the 2020 IRA Contribution and Deduction Limits, the maximum deductible IRA contribution for Susan and Dan, when filing separate tax returns will be as follows :

Susan :

Age = 44 years

AGI = $ 83,000

Covered by an employee-sponsored plan.

No deduction will be allowable under IRA if the AGI is $10,000 or more.

Dan :

Age = 47 years

AGI = $ 6,200

Deduction = Partial deduction = $ 3,000

2.) (a)

Computation of Jack’s Adjusted Gross Income :

Salary                               $ 180,400

Less : Interest on loan       $     5,350

                                          -----------------------

Adjusted Gross Income      $ 175,050

                                        -------------------------

3.) (c)

As per the 2020 IRA Contribution and Deduction Limits, the maximum deductible IRA contribution for Susan and Dan, when filing joint tax returns will be as follows :

Susan’s age = 44 years

Dan’s age = 47 years

AGI = $ 83,000

Susan is covered by an employee-sponsored plan.

As the AGI is less than $104,000

Deduction = Full deduction of amount contributed = $ 6,000.

4.) (b)

As per the 2020 IRA Contribution and Deduction Limits, the maximum deductible IRA contribution for Susan and Dan, when filing joint tax returns will be as follows :

Susan’s age = 44 years

Dan’s age = 47 years

AGI = $ 131,000

Susan is covered by an employee-sponsored plan.

As the AGI is between $104,000 and $ 124,000, deduction = Partial deduction = $ 3,000.