What is the maximum allowable annual contribution


Problem 1: Tina is an auditor for a CPA firm; 80% of the usage of her own automobile is for business trips. She incurred the following total expenses in the current tax year:

Gas: $2,000

Maintenance/Repairs: $1,500

Depreciation: $2,000

Insurance: $1,000

Parking Fees: $ 700

Problem 2: Wyatt is a tax manager for a CPA firm. Eager to expand his knowledge, he attends a professional conference during the current tax year on his own and is not reimbursed by his employer for the following expenditures:

Airfare: $750

Lodging: $600

Conference Registration: $850

Meals: $400

Problem 3: What are the maximum allowable annual contributions for the current tax year that an individual may make to (a) a Keogh Plan, (b) a Solo 401(k) plan, and (c) a SIMPLE plan?

Problem 4: What is the maximum allowable annual contribution for the current tax year to an Individual Retirement Account (IRA) if (a) the individual does not participate in an employer-sponsored retirement plan, and (b) the individual does participate in an employer-sponsored retirement plan? Be sure your response includes reference to a married couple where one spouse does participate and one spouse does not participate in an employer-sponsored plan.

Problem 5: During the current tax year, Allison (single, age 65) takes the following distributions:

  • $25,000 from a traditional IRA established 20 years ago. All prior contributions to this IRA were deductible.
  • $75,000 from a ROTH IRA established 10 years ago, consisting of $30,000 in contributions made by Allison and $45,000 in accumulated earnings.

What amount from each distribution must Allison include in gross income?

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Taxation: What is the maximum allowable annual contribution
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