Donna, Age 50, Is Single and Earns $40,000 Annually

question 1

Multiple Choice

Donna, age 50, is single and earns $40,000 annually. She is covered under her employer's retirement plan. Donna would like to start a traditional IRA and contribute $4,000 this year. Which of the following describes her ability to establish a traditional IRA and the tax treatment of her contribution?

• A) Her contribution is fully tax deductible.
• B) Her contribution is partially tax deductible.
• C) No portion of the contribution is tax deductible.
• D) Donna is not eligible to establish a traditional IRA, so no contribution can be made.

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Definitions:

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