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Alexis and ashton are married filing jointly with AGI of 45,000. They made 1500 contribution to a qualified retirement plan. What is their retirement savings contributions credit

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Answer: Alexis and Ashton's retirement savings contributions credit is $150.

Step-by-step explanation:

AGI up to $39,000: 50% credit rate

AGI $39,001 - $42,500: 20% credit rate

AGI $42,501 - $65,000: 10% credit rate

Since Alexis and Ashton's AGI is $45,000, they fall into the 10% credit rate category. However, the credit rate applies to the contribution made up to a certain limit. For 2023, the limits are:

Married filing jointly: $4,000 contribution limit

In this case, Alexis and Ashton contributed $1,500, which is less than the contribution limit. Therefore, their credit will be based on the 10% credit rate.

To calculate their retirement savings contributions credit, we multiply their contribution by the credit rate:

$1,500 (contribution) * 10% (credit rate) = $150

Therefore, Alexis and Ashton's retirement savings contributions credit is $150.

User Vasil Garov
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