Myers, who is single, has compensation income of $69,000 in 2017. He is an activ

Question

Myers, who is single, has compensation income of $69,000 in 2017. He is an active participant in his employer’s qualified retirement plan. Myers contributes $5,500 to a traditional IRA.

Click here to access Exhibit 19.3 Phaseout of IRA Deduction of an Active Participant.

Phaseout of IRA Deduction of an Active Participant in 2017

Therefore, of the $5,500 contribution, Myers can deduct? _____________

AGI Filing Status Phaseout Begins Phaseout Ends Single and head of household $62,000     $72,000     Married, filing joint return 99,000     119,000     Married, filing separate return –0–     10,000   

Explanation / Answer

1) Calculation of Amount of IRA contribution deduction for the year 2017 :

Since the status of tax payer was single and by assuming the age of the person was not reached or exceeded 50,the maximum contribution that can be made to the Traditional as well as ROTH IRA was $5,500.

And there was a Partial deduction that can be applicable to the contributed amount of $5,500 based on the AGI limits. As per the income provided by the tax payer the deduction amount of $1,660. That is Approximately 30%.

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