William is a single writer (age 35) who recently decided that he needs to save m

Question

William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2015 AGI is $65,000 (all earned income). (Leave no answer blank. Enter zero if applicable.)

If he does participate in an employer-sponsored plan, what is the maximum deductible IRA contribution William can make in 2015?

William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2015 AGI is $65,000 (all earned income). (Leave no answer blank. Enter zero if applicable.)

Explanation / Answer

a) if he does not participate in an employer-sponsored plan.

No employers plan; AGI irrelevant; Maximum of $5,500 (under age 50), subject to earned income; Earned income is greater than maximum contribution, so deduct full $5,500

b) If he does participate in an employer-sponsored plan, what is the maximum deductible IRA contribution William can make in 2015

Participates in employer's plan; look at AGI; AGI of $65,000 is in-between phase-out range of $61,000-71,000; $3,000 over phase-out / $10,000 phase-out range

= 30% not allowed; Maximum of $5,500 * 70% allowed = $3,850

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