During the 2018 tax year, Gwen supports her family as a physicaltherapist. She reports $90,000 of earned income on her Schedule Cand paid the following insurance premiums:
- Family health insurance: $15,000
- Family dental insurance: $2,000
- Health insurance for her 24-year-old son who is not adependent: $3,000
- Long-term care insurance for her 49-year-old husband: $800
Use the following table for long-term care premiumlimitations.
Attained Age Before the Close
of the Taxable Year 2018
Limitation on Premiums 40 or less $420 More than 40 but not more than 50 $780 More than 50 but not more than 60 $1,560 More than 60 but not more than 70 $4,160 More than 70 $5,200
What is Gwen's self-employed health insurance deduction for2018? $___________________
2018 AGI Phase-Out Ranges for Traditional and Roth IRAContributions to be used for this problem.
2018 AGI Phase-Out Ranges forDeductible Traditional IRA Contributions Type of Taxpayer Phase-Out Range Single or HOH, not a plan participant No phase-out Single or HOH, active plan participant $63,000â$73,000 Married, Joint, both active participants $101,000â$121,000 Married, Joint, neither active plan participants No phase-out Married, Joint, one an active participant: (See Note 1 below) Active participant spouse $101,000â$121,000 (Joint AGI) Nonactive participant spouse $189,000â$199,000 (Joint AGI) Note 1: When one spouse is anactive participant in a retirement plan and the other is not, twoseparate income limitations apply. The active participant spousemay make a full deductible IRA contribution unless the$101,000â$121,000 phase-out range applies to the couple's jointincome. The spouse who is not an active participant may make a fulldeductible IRA contribution unless the higher $189,000â$199,000phase-out range applies to the couple's joint income.
2018 AGI Phase-Out Ranges for Roth IRAContributions Filing Status AGI Phase-Out Range Single or HOH $120,000â$135,000 Married, Joint $189,000â$199,000 Note: Active plan participationstatus is not relevant to the Roth IRA phase-out calculation.Special rules apply to married filing separate taxpayers.
a. During 2018, George (a 24-year-old singletaxpayer) has a salary of $46,000, dividend income of $14,000, andinterest income of $3,000. In addition, he has rental income of$1,000. George is covered by a qualified retirement plan.
Calculate the maximum regular IRA deduction that George isallowed.
$____________
b. During 2018, Irene (a single taxpayer, underage 50) has a salary of $114,500 and dividend income of$10,000.
Calculate Irene's maximum contribution to a Roth IRA.
$____________
During the 2018 tax year, Gwen supports her family as a physicaltherapist. She reports $90,000 of earned income on her Schedule Cand paid the following insurance premiums:
- Family health insurance: $15,000
- Family dental insurance: $2,000
- Health insurance for her 24-year-old son who is not adependent: $3,000
- Long-term care insurance for her 49-year-old husband: $800
Use the following table for long-term care premiumlimitations.
| Attained Age Before the Close of the Taxable Year | 2018 Limitation on Premiums | |
| 40 or less | $420 | |
| More than 40 but not more than 50 | $780 | |
| More than 50 but not more than 60 | $1,560 | |
| More than 60 but not more than 70 | $4,160 | |
| More than 70 | $5,200 | |
What is Gwen's self-employed health insurance deduction for2018? $___________________
2018 AGI Phase-Out Ranges for Traditional and Roth IRAContributions to be used for this problem.
| 2018 AGI Phase-Out Ranges forDeductible Traditional IRA Contributions | |
| Type of Taxpayer | Phase-Out Range |
| Single or HOH, not a plan participant | No phase-out |
| Single or HOH, active plan participant | $63,000â$73,000 |
| Married, Joint, both active participants | $101,000â$121,000 |
| Married, Joint, neither active plan participants | No phase-out |
| Married, Joint, one an active participant: | (See Note 1 below) |
| Active participant spouse | $101,000â$121,000 (Joint AGI) |
| Nonactive participant spouse | $189,000â$199,000 (Joint AGI) |
| Note 1: When one spouse is anactive participant in a retirement plan and the other is not, twoseparate income limitations apply. The active participant spousemay make a full deductible IRA contribution unless the$101,000â$121,000 phase-out range applies to the couple's jointincome. The spouse who is not an active participant may make a fulldeductible IRA contribution unless the higher $189,000â$199,000phase-out range applies to the couple's joint income. | |
| 2018 AGI Phase-Out Ranges for Roth IRAContributions | |
| Filing Status | AGI Phase-Out Range |
| Single or HOH | $120,000â$135,000 |
| Married, Joint | $189,000â$199,000 |
| Note: Active plan participationstatus is not relevant to the Roth IRA phase-out calculation.Special rules apply to married filing separate taxpayers. | |
a. During 2018, George (a 24-year-old singletaxpayer) has a salary of $46,000, dividend income of $14,000, andinterest income of $3,000. In addition, he has rental income of$1,000. George is covered by a qualified retirement plan.
Calculate the maximum regular IRA deduction that George isallowed.
$____________
b. During 2018, Irene (a single taxpayer, underage 50) has a salary of $114,500 and dividend income of$10,000.
Calculate Irene's maximum contribution to a Roth IRA.
$____________
