What Is the Maximum Amount a 55-Year-Old Taxpayer and a 48-Year-Old

question 40

Essay

What is the maximum amount a 55-year-old taxpayer and a 48-year-old spouse can put into a Traditional or Roth IRA for 2014, assuming they earn $85,000 in total and are not participants in pension plans?

---

Definitions:

Residual Value

The estimated salvage value of an asset at the end of its useful life.

Double-Declining-Balance

A method of accelerated depreciation where an asset's book value is decreased at double the rate of its straight-line depreciation.

Residual Value

It's the estimated value that an asset will realize upon its sale at the end of its useful life, after depreciation has been taken into account.

Depreciable Cost

The amount of an asset’s cost that will be allocated to depreciation expense over its useful life, determined by the difference between the asset’s initial cost and its residual value.