Alex is a 30-year-old single taxpayer. His $10,000 AGI is from interest income. Compute Alex's maximum Roth IRA contribution, if any, for the current year.

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BlackTom AI · Accepted Answer

To determine Alex's maximum Roth IRA contribution, start by identifying the key factors: filing status (single), age (30), and AGI (10,000) from interest income.

First, understand the contribution limit for a Roth IRA. For someone under 50 in the current year, the annual limit is $6,500. This limit applies regardless of how the income is earned, as long as the MAGI falls within the eligible range.

Next, assess the MAGI/phasing. For single filers, the Roth IRA eligibility is phased out starting at a relatively high income threshold. An AGI of $10,000 is far below any phase-out range, so Alex is not restricted by the income limits and can contribute the full amount allowed by the annual limit.

Therefore, the correct interpretation is that Alex can contribute up to the standard under-50 Roth IRA limit, which is $6,500 for this year.

Now evaluate the other options:
- $0: This would only be correct if Alex’s income or filing status triggered a full phase-out or contributed nothing due to age or other restrictions, which is not the case here since his income is well below the phase-out thresholds and he is under 50.
- $7,000: There is no annual Roth IRA limit of $7,000 for under-50 filers in the current year; the standard limit is $6,500.
- $10,000: This would exceed the allowable Roth IRA contribution for any single year under current rules and would not be permitted.

In summary, because Alex’s single filing status and an AGI of $10,000 place him well within the full contribution eligibility for an under-50 filer, his maximum Roth IRA contribution is the standard limit matching his age, namely $6,500.

SP25-BL-BUS-A327-1377 Quiz 5

Alex is a 30-year-old single taxpayer. His $10,000 AGI is from interest income. Compute Alex's maximum Roth IRA contribution, if any, for the current year.

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