Raul and Jenna Are Married and Are Both Working

question 28

Essay

Raul and Jenna are married and are both working. They are both over age 50. Jenna participates in her employer's Sec.401(k)plan and makes the maximum contribution and enjoys a company matching contribution. Raul's employer does not maintain a retirement plan so he would like to save as much as possible in a tax-advantaged manner for retirement. They expect to report $185,000 of AGI for 2014.
a.What is the maximum amount that Raul can contribute to a traditional IRA and how much can he deduct?
b.What is the maximum amount that Raul can contribute to a Roth IRA and how much can he deduct?
c.How could Raul contribute to both the traditional IRA and Roth IRA to maximize current and future tax savings?

---

Definitions:

MP3 Players

Portable digital devices designed to play music files in MP3 format, allowing users to listen to music on the go.

Quantity Supplied

The quantity of a product or service that sellers are ready and able to offer for sale at a specific price during a certain time frame.

Spinach Enchiladas

A dish comprising tortillas rolled around a filling, typically of spinach and cheese, and covered with a chili pepper sauce.

Supply

Supply is the total amount of a product or service that is available to consumers at a given price range and time period.