Question

Sally is single, age sixty, and works as sales clerk in 2018. She has no other income. Sally contributed $2,000 to her IRA. After the adjustment for her IRA deduction, the AGI on her return is $26,000. What is the maximum retirement savings contribution credit she can claim?a) 0b) $200c) $400d)$1000

Answer 1

$200

Step-by-step explanation:

Data provided in the question:

Sally is single and age = 60

Amount contributed by Sally to her IRA = $2,000

AGI on her return = $26,000

Now,

For single and aged 60:

The maximum eligible contribution per taxpayer will be $2,000

The credit rate = 10%.

Therefore,

The maximum credit that Sally will get

= 10% of Amount contributed by Sally to her IRA

= 10% of $2000

= 0.10 × $2,000

= $200