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ID: 2510460 • Letter: T
Question
ttps://newconnect.mheducation.com/flow/connect.html omework Help Save & Exit Su Required information The following information applies to the questions displayed below Penny is 57 years old and she participates in her employers 4010) plan. During the year, she contributed $2,000 to her 401(k) account. Penny's AGI is $29,000 after deducting her 401k) contribution. What is Penny's saver's credit in each of the following alternative scenarios? (Use Exhibit 13.9) d. Penny is married and files a joint return with her husband. They have three dependents.Explanation / Answer
Answer
Penny’s saver’s credit is $1000 ($2,000 × 50%)
Since Penny files as married filing jointly,
her applicable percentage based on her AGI of $29,000 is 50%
.Penny contributed $2,000 to a qualified plan. Also, the first $2,000 of contributions counts towards thesaver’s credit. Therefore, Penny’s saver’s credit is $1000 ($2,000 × 50%). The number of dependents is irrelevant for purposes of the saver’s credit, only filing status and AGI are pertinent in determining the amount of the saver’s credit.
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