Question

A single individual who is not an active participant in a qualified retirement plan, earned $28,000. The maximum tax deductible contribution that can be made to an IRA is?[A] $2,000[B] $3,600[C] $5,500[D] $7,000[C] -

Answer 1

Answer:

D) $7,000

Explanation:

The following contribution limits are valid for the 2019 and 2020 tax periods:

If the taxpayer is over 50 years old and is not actively participating in an employer sponsored retirement plan, he/she can make a $7,000 tax deductible contribution per year to an IRA. This amount is the same regardless of the taxpayer's adjusted gross income.

If the taxpayer is under 50, the maximum tax deductible contribution is $6,000 per year.