Question

Charles, a single 29-year-old CEO of a technology start-up company, earns a $2 million base salary with a $400,000 bonus. He is not a participant in any retirement plans at work. What is the maximum deductible IRA contribution Charles can make during 2019?a. $0.b. $1,000.c. $4,000.d. $5,500.

Answer 1

d. $5,500

Step-by-step explanation:

An Individual Retirement Account (IRA) which is controlled by the Internal Revenue Service (IRS) is an account that is used to save for retirement while enjoying tax advantages. IRA accounts are limited by the amount that can be contributed each year.

For 2018, 2017, 2016 and 2015, the annual total contributions for any IRA account is $5,500 for people below the age of 50 and $6,500 for people who are 50 years and above.

For 2019 and 2020, the annual total contributions for any IRA account is $6,000 for people below the age of 50 and $7,000 for people who are 50 years and above.