Bailey and Jen have an AGI of $208,000. What is the most they can contribute to a traditional IRA for 2022?

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Multiple Choice

Bailey and Jen have an AGI of $208,000. What is the most they can contribute to a traditional IRA for 2022?

For the year 2022, individuals can contribute to a traditional IRA regardless of income level, but the tax deductibility of those contributions may be affected by modified adjusted gross income (MAGI) and participation in employer-sponsored retirement plans. In the case of Bailey and Jen, who have an AGI of $208,000, let's first consider the contribution limits. For the tax year 2022, individuals under age 50 can contribute up to $6,000 to a traditional IRA, while those age 50 and older can contribute $7,000 (which includes a $1,000 catch-up contribution). Assuming both Bailey and Jen are under 50, they can each contribute $6,000 to their IRAs. The tax deductibility of these contributions begins to phase out for married couples filing jointly at an AGI of $198,000 and is completely phased out at $208,000. Since their AGI is exactly at $208,000, they are at the limit where their traditional IRA contributions will not be tax-deductible, but they can still make the contribution. Therefore, the most Bailey and Jen can contribute to their traditional IRAs for the year 2022 is $6,000 each, totaling $

For the year 2022, individuals can contribute to a traditional IRA regardless of income level, but the tax deductibility of those contributions may be affected by modified adjusted gross income (MAGI) and participation in employer-sponsored retirement plans.

In the case of Bailey and Jen, who have an AGI of $208,000, let's first consider the contribution limits. For the tax year 2022, individuals under age 50 can contribute up to $6,000 to a traditional IRA, while those age 50 and older can contribute $7,000 (which includes a $1,000 catch-up contribution). Assuming both Bailey and Jen are under 50, they can each contribute $6,000 to their IRAs.

The tax deductibility of these contributions begins to phase out for married couples filing jointly at an AGI of $198,000 and is completely phased out at $208,000. Since their AGI is exactly at $208,000, they are at the limit where their traditional IRA contributions will not be tax-deductible, but they can still make the contribution.

Therefore, the most Bailey and Jen can contribute to their traditional IRAs for the year 2022 is $6,000 each, totaling $

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