2023 AGI Phase-Out Ranges for Traditional and Roth IRA Contributions to be used for this problem. 2023 AGI Phase-Out Ranges for Deductible Traditional IRA Contributions Type of Taxpayer Single or Head of Household, not a plan participant Single or Head of Household, active plan participant Married filing jointly, both active participants Married filing jointly, neither active plan participants Married filing jointly, one active participant: Active participant spouse Nonactive participant spouse Phase-Out Range No phase-out $73,000-$83,000 $116,000-$136,000 No phase-out (See Note 1 below) $116,000-$136,000 (Joint AGI) $218,000-$228,000 (Joint AGI) Note 1: When one spouse is an active participant in a retirement plan and the other is not, two separate income limitations apply. The active participant spouse may make a full deductible IRA contribution unless the $116,000-$138,000 phase-out range applies to the couple's joint income. The spouse who is not an active participant may make a full deductible IRA contribution unless the higher $218,000-$228,000 phase-out range applies to the couple's joint income. 2023 AGI Phase-Out Ranges for Roth IRA Contributions Filing Status Single or Head of Household Married filing jointly AGI Phase-Out Range $138,000-$153,000 $218,000-$228,000 Note: Active plan participation status is not relevant to the Roth IRA phase-out calculation. Special rules apply to married filing separate taxpayers. If required, round your final answer to the nearest dollar. a. During 2023, Neeraj (a 24-year-old single taxpayer) has a salary of $62,000, dividend income of $14,000, and interest income of $4,000. In addition, he has rental income of $1,000. Neeraj is covered by a qualified retirement plan. Calculate the maximum regular IRA deduction that Neeraj is allowed. $ x b. During 2023, Irene (a single taxpayer, under age 50) has a salary of $132,000 and dividend income of $10,000. Calculate Irene's maximum contribution to a Roth IRA. c. Kalpana, a single taxpayer age 63, takes a $10,000 distribution from her traditional IRA to purchase furniture for her home. Over the years, she has contributed $36,000 to the IRA which she deducted. The IRA has a $50,000 balance at the time of the distribution. Determine how much of Kalpana's distribution is taxable. d. Same as part c., except the distribution is from a Roth IRA. 0 ✓

2023 AGI Phase-Out Ranges for Traditional and Roth IRA Contributions to be used for this problem. 2023 AGI Phase-Out Ranges for Deductible Traditional IRA Contributions Type of Taxpayer Single or Head of Household, not a plan participant Single or Head of Household, active plan participant Married filing jointly, both active participants Married filing jointly, neither active plan participants Married filing jointly, one active participant: Active participant spouse Nonactive participant spouse Phase-Out Range No phase-out $73,000-$83,000 $116,000-$136,000 No phase-out (See Note 1 below) $116,000-$136,000 (Joint AGI) $218,000-$228,000 (Joint AGI) Note 1: When one spouse is an active participant in a retirement plan and the other is not, two separate income limitations apply. The active participant spouse may make a full deductible IRA contribution unless the $116,000-$138,000 phase-out range applies to the couple's joint income. The spouse who is not an active participant may make a full deductible IRA contribution unless the higher $218,000-$228,000 phase-out range applies to the couple's joint income. 2023 AGI Phase-Out Ranges for Roth IRA Contributions Filing Status Single or Head of Household Married filing jointly AGI Phase-Out Range $138,000-$153,000 $218,000-$228,000 Note: Active plan participation status is not relevant to the Roth IRA phase-out calculation. Special rules apply to married filing separate taxpayers. If required, round your final answer to the nearest dollar. a. During 2023, Neeraj (a 24-year-old single taxpayer) has a salary of $62,000, dividend income of $14,000, and interest income of $4,000. In addition, he has rental income of $1,000. Neeraj is covered by a qualified retirement plan. Calculate the maximum regular IRA deduction that Neeraj is allowed. $ x b. During 2023, Irene (a single taxpayer, under age 50) has a salary of $132,000 and dividend income of $10,000. Calculate Irene's maximum contribution to a Roth IRA. c. Kalpana, a single taxpayer age 63, takes a $10,000 distribution from her traditional IRA to purchase furniture for her home. Over the years, she has contributed $36,000 to the IRA which she deducted. The IRA has a $50,000 balance at the time of the distribution. Determine how much of Kalpana's distribution is taxable. d. Same as part c., except the distribution is from a Roth IRA. 0 ✓

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter9: Deductions: Employee And Self-employed-related Expenses

Section: Chapter Questions

Problem 39P

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