Wilson and Joan, Both in Their 30s, File a Joint

question 8

Essay

Wilson and Joan, both in their 30s, file a joint income tax return for 2018.Wilson's wages are $15,000 and Joan's wages are $23,000 for the year.Their total adjusted gross income is $38,000, and Joan is covered by a qualified pension plan at work but Wilson is not.
a.​What is the maximum amount that Wilson and Joan may each deduct for contributions to their traditional individual retirement accounts?
b.​​If Joan's wages are $88,000 for 2018, instead of $23,000, and their adjusted gross income is $103,000, what is the maximum amount that Wilson and Joan may each deduct for contributions to their traditional individual retirement accounts?

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Definitions:

Labour Force Participation

The proportion of the working-age population that is engaged in or seeking employment.

Workforce

The collective group of employees or labor force of an organization or economy.

Downsizing Strategies

Plans and approaches deployed by organizations to reduce costs through workforce reductions, realignment, or restructuring.

Negative Impact

The adverse effects or harmful consequences resulting from a particular action or policy.