Caleb is age 51 and works for Helena Corporation, where he earned $110,000. Celeste (age 48), his wife, does not work outside the home and has no earned income. Caleb and Celeste file a married, filing joint tax return. Caleb contributed $15,000 to his 401k account with Helena Corporation. What is the maximum Cáleb can contribute to his Roth IRA and what is the maximum Celeste can contribute to her Roth IRA for 2020 (I need two answers; one for each spouse)?

Caleb is age 51 and works for Helena Corporation, where he earned $110,000. Celeste (age 48), his wife, does not work outside the home and has no earned income. Caleb and Celeste file a married, filing joint tax return. Caleb contributed $15,000 to his 401k account with Helena Corporation. What is the maximum Cáleb can contribute to his Roth IRA and what is the maximum Celeste can contribute to her Roth IRA for 2020 (I need two answers; one for each spouse)?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 78TPC: Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of...

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Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of approximately 120,000 per year. a. Assume that Bonnies taxable income is 40,000 without considering the income from the rib joint. How much tax will she pay on the 120,000 of income from the rib joint? b. You work for the firm that prepares Bonnies tax return. Bonnie has asked the partner for whom you work to advise her on how she might lower her taxes. The partner has assigned you this task. Draft a memorandum to the partner that contains at least two options Bonnie could use to lower her taxes. For each option, explain the calculations that support the tax savings from your recommendation.
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