Question

Sammy, age 31, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $55,000 in 2015. The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

a. $2,800.
b. $3,500.
c. $5,000.
d. $5,500.
e. None of the above.

Answer 1

For 2015, Sammy, age 31 with a modified AGI of $55,000, can deduct the maximum contribution limit for a traditional IRA, which is $5,500. Option d.

Step-by-step explanation:

The subject of the student's question is related to Individual Retirement Accounts (IRAs) and the maximum deductible contributions one can make based on the tax laws of a given year.

According to the provided information, for the years 2014 and 2015, the maximum contribution an individual could make to all of their traditional and Roth IRAs was limited to $5,500 unless they were age 50 or older, in which case they could contribute $6,500.

Considering Sammy's age of 31 and his modified Adjusted Gross Income (AGI) of $55,000, neither being an active participant in a qualified retirement plan nor exceeding the income limits, the maximum amount he can deduct for a contribution to a traditional IRA would be $5,500. Option d.