Reference no: EM132479720

Question 1: Diane works for a company that does not have a retirement plan. Diane is considering making contributions to an IRA. Which of the following is a condition under which a taxpayer may set up and make contributions to a traditional IRA?

a) The taxpayer must have earned taxable income during the year and has not reached age 701⁄2 by the end of the year.

b) Her only source of earnings was from a pension, and she was under the age of 701⁄2 by the end of the year.

c) The taxpayer must have earned taxable income during the year and has not reached 591⁄2 by the end of the year.

d) The taxpayer must have earned taxable income during the year.

Question 2: Jodie, age 48, filed as Head of Household. She is not covered by a retirement plan at work. Her modified AGI is $68,000. She contributed $3,000 to her traditional IRA. Which of the following statements is true?

a) Jodie may not deduct a contribution to an IRA.

b) Jodie may deduct a maximum of $1,000 of her traditional IRA contribution.

c) Jodie may deduct the full $3,000 traditional IRA contribution.

d) Jodie may not contribute to her traditional IRA.

Question 3: Evan is considering a Roth IRA as his primary retirement plan. Which of the following is a condition under which a taxpayer may set up and make contributions to a Roth IRA?

a) The taxpayer had earned taxable income during the year and had not reached 701⁄2 by the end of the year.

b) The taxpayer's only source of earnings was from a pension, and he was under the age of 701⁄2 by the end of the year.

c) The taxpayer had earned taxable income during the year and had not reached 591⁄2 by the end of the year.

d) The taxpayer had earned taxable income during the year, and his income was below a specified limit.