Jose Does Not Have a Retirement Plan at Work

question 130

Multiple Choice

Jose does not have a retirement plan at work.He currently earns $30,000 in salary and is in the 15% marginal tax bracket.If he contributes the maximum contribution of $5,500 to his traditional IRA,how much money will he save on his income tax liability?

• A)He won't save any money,since only the Roth IRA has tax deductions on contributions.
• B)He won't save any money,since his income does not qualify for tax deductions for a qualified plan.
• C)$825
• D)$5,000

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Definitions:

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration, absorbed by plants in photosynthesis.

Citric Acid Cycle

Cyclic pathway that harvests energy from acetyl–CoA; part of aerobic respiration. Also called the Krebs cycle.

Glycolysis

The metabolic pathway that converts glucose into pyruvate, generating ATP and NADH without the need for oxygen.

NADH

A coenzyme found in all living cells that is produced during glycolysis and used as an electron carrier in the process of cellular respiration.