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1. Who can contribute to a traditional IRA, and how much? Nick, age 53, is single...

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Accounting

1. Who can contribute to a traditional IRA, and how much?

Nick, age 53, is single and has AGI of $67,000. He contributes$5,000 to his IRA in 2018.
How much can Nick deduct if he is not covered by anemployer-sponsored qualified retirement plan?
How much can Nick deduct if he is covered by an employer-sponsoredqualified retirement plan?

2. This problem is about self-employment taxes. Don't forget theceiling on Social Security taxes.

George has $91,700 in salary from his full-time position and$43,000 in net income in 2018 from his sole proprietorship. What ishis self-employment tax? What portion of this can he deduct?

Answer & Explanation Solved by verified expert
4.4 Ratings (743 Votes)
Answer part 1 Since Nicks age is over 50 years he is entitled to additional IRA deduction of 1000 over and above the standard limit of 5500 thereby entitling him to contribute a total of 6500 to his IRA in 2018 if he is not    See Answer
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1. Who can contribute to a traditional IRA, and how much?Nick, age 53, is single and has AGI of $67,000. He contributes$5,000 to his IRA in 2018.How much can Nick deduct if he is not covered by anemployer-sponsored qualified retirement plan?How much can Nick deduct if he is covered by an employer-sponsoredqualified retirement plan?2. This problem is about self-employment taxes. Don't forget theceiling on Social Security taxes.George has $91,700 in salary from his full-time position and$43,000 in net income in 2018 from his sole proprietorship. What ishis self-employment tax? What portion of this can he deduct?

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