Dan and Dawn Are Married and File a Joint Return

question 92

Short Answer

Dan and Dawn are married and file a joint return.During the current year,Dan had a salary of $30,000 and Dawn had a salary of $36,000.Both Dan and Dawn are covered by an employer-sponsored pension plan.Their adjusted gross income for the year is $91,000.Determine the maximum IRA contribution and deduction amounts.
$\begin{array}{cl}\begin{array}{c}\text { Maximum } \\\underline {\text { Contribution }}\end{array} & \begin{array}{c}\text { Maximum } \\\underline {\text { Deduction }}\end{array} \\a. \$ 11,000 & \$ 11,000\\b.\$ 11,000 & \$ -0-\\c.\$ 11,000 & \$ 5,500 \\d.\$ 5,500 & \$ -0- \\e.\$ 8,000 & \$ 8,000\end{array}$

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Definitions:

Legitimate Power

Authority that a person or a group holds that is accepted and recognized by others, often due to a formal position or role.

Reward Power

A type of power that comes from the ability to confer rewards on others for complying with one's wishes or directives.

Coercive Power

A form of power that is derived from the ability to punish or penalize others.

Informal Leaders

Individuals within an organization who influence others through personal forms of power and relationships rather than through formal authority positions.