Question

Jahan, a 51-year-old single taxpayer, earned $40,000 in wages. he is covered by an employer-sponsored retirement plan. what is his maximum allowable contribution to a traditional ira for 2022?

O $6,000
O $6,500
O $7,000
O $20,500

Answer 1

The maximum allowable contribution to a traditional IRA for a 51-year-old in 2022 is $7,000, including the standard limit and the additional catch-up contribution for individuals who are age 50 or older. Considering as a, b, c and d, option number c is correct.

Step-by-step explanation:

Jahan, a 51-year-old single taxpayer who is covered by an employer-sponsored retirement plan, has a query regarding his maximum allowable contribution to a traditional IRA for the year 2022. Considering his age, Jahan is eligible to make catch-up contributions in addition to the standard contribution limits set forth for traditional IRAs. For the tax year 2022, the standard contribution limit to a traditional IRA is $6,000.

However, for those who are age 50 or older, an additional catch-up contribution of $1,000 is allowable. Therefore, Jahan's maximum allowable contribution to a traditional IRA for 2022 is $7,000, which includes the standard $6,000 plus the $1,000 catch-up contribution. It's important for Jahan to know that these limits are subject to change and should be verified for the current tax year when making financial planning decisions.