Jackson and Ashley Turner (both 45 years old) are married and want to contribute

Question

Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley. In 2017, their AGI is $188,400. Jackson and Ashley each earned half of the income. (Leave no answer blank. Enter zero if applicable.)

a. How much can Ashley contribute to her Roth IRA if they file a joint return?

b. How much can Ashley contribute if she files a separate return?

c. Assume that Ashley earned all of the couple’s income and that she contributed the maximum amount she is allowed to contribute to a Roth IRA. What amount can be contributed to Jackson’s Roth IRA if they file a joint return?

Explanation / Answer

Solution :

a. If they file joint return then Ashley can contribute the following

Threshold limit for 2017 = $186,000 - $196,000

Ashley maximum contribution is phased out = ($188,400 - $186,000) / ($196,000 - $186,000)

= 0.24 or 24%

There fore, of $5,500 maximum contribution, Ashley may contribute $4,180 [ $5,500 * 76%(100% - 24%)]

Contribution to Roth IRA = $4,180.

b. Contribution to Roth IRA = $0.

If Ashley files seperate return, as threshold limit is from $0 - $10,000 ( Age is below 50 )

c. Contribution to Roth IRA = $4,180.

Amount that can be contributed to Jackson's Roth IRA if they file a joint return = $4,180.

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