Problem:
Phil, age 30, is married and files a joint return with his spouse. On February 15, 2014, Phil establishes an IRA for himself and a spousal IRA for his spouse with a $10,000 contribution, $5,000 for himself and $5,000 for his wife. Phil's spouse earned $1,000 in 2014 from a part time job and their combined AGI is $55,000. Neither Phil nor his spouse is an active participant in an employer-sponsored retirement plan.
Required:
Question 1: What amount of the contribution is deductible?
Question 2: To what year can the contribution apply? (Assume that an election is made to treat Phil's spouse as having no compensation.)
Question 3: Is the deduction reported as for AGI or from AGI?
Question 4: How would your answer to Part a) change, if at all, if Phil and his spouse were active participants in an employer-sponsored retirement plan?
Note: Please show basic calculation