Final answer:
Tyne can contribute up to the IRA limit, which is typically $6,000 per year, plus a $1,000 'catch-up' contribution since she is over 50, but her ability to deduct her Traditional IRA contribution may be reduced due to her $71,000 AGI and being covered by an employer retirement plan. The exact deductible amount depends on the IRS phase-out ranges for that tax year, and it would be wise for Tyne to consult current IRS guidelines or a tax professional.
Step-by-step explanation:
Tyne, a 48-year-old taxpayer, is an active participant in an employer-sponsored qualified retirement plan and has an adjusted gross income (AGI) of $71,000 for the year 2023. For 2023, the Internal Revenue Service (IRS) has certain rules for the deductibility of contributions to a Traditional IRA based on AGI levels when a person is covered by a retirement plan at work. While the maximum contribution limits to a Traditional IRA for 2023 have not been explicitly provided in this context and are subject to change, the typical limit generally increases in line with inflation. In recent years, the maximum contribution has been set at $6,000 for individuals under 50 and an additional $1,000 for those aged 50 or older, known as a 'catch-up' contribution, totaling $7,000.
Since Tyne's AGI is $71,000, she may face some limitations on the deductibility of her Traditional IRA contributions because there are phase-out ranges for deductions based on income levels. For single taxpayers covered by a workplace retirement plan, the phase-out range for deductibility commonly starts below $71,000. Therefore, it is likely that Tyne will be able to make the maximum contribution to her Traditional IRA, but her ability to deduct this contribution will likely be reduced. She should consult with a tax professional or the current IRS guidelines to determine the precise amount of her deductible contribution.
As for the Roth IRA, contributions are made with after-tax dollars and are not deductible, but earnings grow tax-free. Eligibility to contribute to a Roth IRA is also subject to income limits, which Tyne may or may not fall within, depending on inflation adjustments to these limits.