Question

Finnegan and Fiona, both age 45, are married and have AGI of $170,000. Finnegan is an active participant in his employer's qualified plan; Fiona is not. How much may Fiona contribute and deduct to her traditional IRA?

a.) $7,000
b.) $6,000
c.) $0
d.) $4,000

Answer 1

Fiona may not contribute and deduct any amount to her traditional IRA.

Step-by-step explanation:

Finnegan and Fiona's AGI is $170,000. Fiona is not an active participant in her employer's qualified plan. According to the IRS rules, since Finnegan is an active participant and their AGI is above a certain threshold, their ability to deduct contributions to a traditional IRA is limited. In this case, Fiona may not contribute and deduct any amount to her traditional IRA (option c.) $0).