Question

Required information Problem 13-69 (LO 13-4) (Static) [The following information applies to the questions displayed below.] In 2022, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations.

Answer 1

Susan can contribute up to $6,000 to her deductible IRA, and so can Dan.

Step-by-step explanation:

To compute the maximum deductible IRA contribution for each spouse, we need to consider their ages. According to the IRS, for the tax year 2022, the maximum contribution for individuals under the age of 50 is $6,000. For individuals who are 50 years old or older, an additional catch-up contribution of $1,000 is allowed, making the maximum contribution $7,000.

In this case, Susan is 44 years old, so her maximum deductible IRA contribution is $6,000. Dan is 47 years old, so his maximum deductible IRA contribution is also $6,000.

To summarize, Susan and Dan can each contribute up to $6,000 to their deductible IRAs for the tax year 2022.

Answer 2

Where the above conditions and alternative situation are given, note that: Susan - Maximum deductible IRA contribution = $6,000

Dan - Maximum deductible IRA contribution = $6,000

Where the alternative situation is given: A- Maximum Deductible IRA Contributions

Susan-

Age- 44 (under 50)

Covered by an employee-sponsored plan- Yes

AGI before IRA contribution deductions- $207,000

In this case, Susan can contribute the maximum allowable IRA contribution because her income exceeds the IRA deduction phase-out range for individuals covered by an employer-sponsored plan.

For 2022, the maximum IRA contribution for individuals under 50 is $6,000.

Therefore, Susan's maximum deductible IRA contribution is $6,000.

Dan-

Age- 47 (under 50)

Unemployed- Yes

AGI before IRA contribution deductions- $0 (assuming Dan has no other income)

Since Dan has no earned income and is not covered by an employee-sponsored plan, he is eligible for the full IRA deduction.

The maximum IRA contribution for individuals under 50 in 2022 is also $6,000.

Therefore, Dan's maximum deductible IRA contribution is also $6,000.

Thus, it is correct to state that:

Susan- Maximum deductible IRA contribution = $6,000

Dan- Maximum deductible IRA contribution = $6,000

Full Question:

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Required information Problem 13-69 (LO 13-4) (Static) [The following information applies to the questions displayed below.] In 2022, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations.

Alternative situation A: a. Susan's salary and the couple's AGI before any IRA contribution deductions is $207,000- The couple files a joint tax return.