Question

Use the case scenario below to answer questions 6 and 7. For full credit, you must answer each part of the question. Each response should be a minimum of 100 words. Case Scenario: Molly is a 28-year-o

Answer 1

Molly is eligible to contribute $6,000 to her IRA for the current tax year.

Molly's case, as the scenario doesn't provide additional details that would affect her contribution limit.

Step-by-step explanation

To determine Molly's maximum IRA contribution, we consider her age and the annual contribution limit set by the IRS. As Molly is 28 years old, the maximum contribution limit for her IRA is $6,000 for the tax year 2023. The IRS typically adjusts contribution limits periodically, and for individuals under 50 years old, the maximum allowed contribution as of 2023 is $6,000.

The calculation is straightforward for individuals below 50 years old, as they can contribute up to $6,000 per year to their IRA. This amount is consistent irrespective of income level or other factors. In some cases, individuals might have lower contribution limits based on their income and participation in employer-sponsored retirement plans, but this doesn't apply in Molly's case, as the scenario doesn't provide additional details that would affect her contribution limit.

Given Molly's age and the current IRS limit for individuals below 50 years old, Molly can contribute the full amount of $6,000 to her IRA for the tax year 2023. This allows her to take advantage of tax-advantaged savings for her retirement.