Barbara is a single taxpayer who had a 2015 adjusted gross income of $25,000 and
ID: 2500555 • Letter: B
Question
Barbara is a single taxpayer who had a 2015 adjusted gross income of $25,000 and contributed $4,000 to her traditional IRA. Assuming she has a $2,000 income tax liability for the year, what is her maximum retirement contribution savings credit?
a. $200
b. $800
c. $1,000
d. $2,000
Gail and Bob are married and file a joint tax return in 2015. They had a $34,000 adjusted gross income and each deferred $2,000 into their employer’s 401(k) plan. If they have a $500 income tax liability, what is the amount of their retirement contribution savings credit?
a. $0
b. $500
c. $1,000
d. $2,000
Bill, age 65, has 2015 unreimbursed medical expenses totaling $20,000 and an adjusted gross income of $170,000. What is the amount of such medical expenses he can deduct?
a. $0
b. $3,000
c. $7,250
d. $20,000
Carol is eligible for a $2,000 health insurance premium credit in 2015. How much of that credit will she actually receive if she has a total income tax liability of only $500?
a. $0
b. $500
c. $1,500
d. $2,000
Explanation / Answer
Maximum allowable contribution is $5000.
Retirement contribution credit= maximum allowed contribution – contribution she is making
=5000 -4000
=1000
Hence option C is correct.
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