Question

Michael is single and 35 years old. He is a participant in his employer's sponsored retirement plan. How much can Michael contribute to a Roth IRA in each of the following alternative situations? a. Michael's AGl is $56,000 after he contributed $4,300 to a traditional IRA Contribution to Roth IRA b. Michael's AGI is $86,000 before any IRA contributions. Contribution to Roth IRA c. Michael's AGI is $141,000 before any IRA contributions. ontribution to Roth IRA

Answer 1

a)Michael’s AGI is $56,000 after he contributed $4,300 to a traditional IRA.
A taxpayer’s contributions to traditional and Roth IRAs may not exceed $5,500, Michael has contributed $4,300 to a traditional IRA because his AGI was below the phase-out threshold, he was able to deduct all $4,300 of that contribution. so remaining he may contribute $1200 to the Roth IRA.
Contribution to Roth IRA	$ 1,200.00
b)
Michael’s AGI is $86,000 before any IRA contributions.
Contribution to Roth IRA	$ 5,500.00
Michael’s AGI exceeds the phase-out limit so he cannot take a traditional IRA deduction so he has to contribute $5500 to the Roth IRA
c)
Michael’s AGI is $141,000 before any IRA contributions.
Contribution to Roth IRA	$            -
Michael’s AGI exceeds the phase-out limit so he cannot contribute directly to a Roth IRA for 2018.