Question

During 2019, Jacob, a 19 year old full-time student, earned $4,500 during the year and was not eligible to participate in an employer-sponsored retirement plan. The general limit for deductible contributions to an IRA during 2019 is $6,000. How much of a tax-deductible contribution can Jacob make to an IRA?

Answer 1

Answer:

the tax-deductible contribution would be $4,500 made to an IRA

Explanation:

The computation of the tax deductible contribution make to an IRA is as follows:

It could be the lower amount of the earned income or the general limit

The earned income is $4,500

And, the general limit is $6,000

So the lesser amount is $4,500

Therefore the tax-deductible contribution would be $4,500 made to an IRA