Question

Martha and Rob, a married couple, under 50 years of age, have adjusted gross income on their 2019 joint income tax return of $45,000, before considering any IRA deduction. Martha and Rob have no earned income. What is the amount of Martha’s maximum deductible IRA contribution?

Answer 1

Answer: $0

Explanation:

In the United States tax law, there exists 2 principal types of IRAs. They include: the traditional IRA and the Roth IRA.

Annual contributions are deductible when made to a traditional IRA, and in which case tax is paid on the retirement distributions.

But annual contributions made to a Roth IRA aren't deductible, and in which case taxes are not paid on retirement distributions.

Martha’s maximum deductible IRA contribution is $0 because taxes are not paid in the current year on earnings in both types of IRAs.