Janet, age 29, is unmarried and is an active participant in a qualified retireme

Question

Janet, age 29, is unmarried and is an active participant in a qualified retirement plan. Her modified AGI is $64,000 in 2017.

Click here to access Exhibit 19.3. Do not round intermediate computations.

a. Janet can contribute $ to her traditional IRA, but she can deduct $.

b. Assume instead that Janet is a participant in a SIMPLE IRA and that she elects to contribute 4% of her compensation to the account, while her employer contributes 3%.

Janet will contribute $ to her SIMPLE IRA account. Her employer will contribute $. The amount that will vest immediately is $.

Explanation / Answer

a. Janet can contribute a much amount as she want to invers in IRA but she will get tax deduction on a maximum of $ 5500 contribution to her traditional IRA for 2017.

b. Janet's Contribution = 64000 * 4% = 2560 and

employer's contribution = 64000 * 3% = 1920

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