If an Individual Is Ineligible to Make a Deductible Contribution

question 85

True/False

If an individual is ineligible to make a deductible contribution to a traditional IRA, nondeductible contributions of any amount can be made to a traditional IRA.

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Definitions:

Cost Savings

Reductions in expenditures achieved through methods such as negotiation, effciency improvements, or substitution.

Pretax Return

The profit earned by a business before the deduction of tax expenses.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value

A calculation that determines the present value of a series of future cash flows, minus the initial investment, used to assess the profitability of investments.