ACC/307 ACC307 ACC 307 WEEK 9 Chapter 13 Homework

Marissa participates in her employer’s nonqualified deferred compensation plan. For 2015, she is deferring 10 percent of her $320,000 annual salary.

Assuming this is her only source of income and her marginal income tax rate is 30 percent, how much taxdoes Marissa save in 2015 by deferring this income (ignore payroll taxes)?

Harriet and Harry Combs (both 37 years old) are married and both want to contribute to a Roth IRA. In 2015, their AGI is $50,000. Harriet earned $46,000 and Harry earned $4,000. (Leave no answer blank. Enter zero if applicable.)

a.

How much can Harriet contribute to her Roth IRA if they file a joint return?

b.

How much can Harriet contribute if she files a separate return?

c.

How much can Harry contribute to his Roth IRA if they file separately?

Sarah was contemplating making a contribution to her traditional individual retirement account for 2015. She determined that she would contribute $5,500 to her IRA and she deducted $5,500 for the contribution when she completed and filed her 2015 tax return on February 15, 2016. Two months later, on April 15, Sarah realized that she had not yet actually contributed the funds to her IRA. On April 15, she went to the post office and mailed a $5,500 (for all) check to the bank holding her IRA. The bank received the payment on April 18.

In which year is Sarah’s $5,500 contribution deductible?

2015

Hope is a self-employed taxpayer who turns 54 years old at the end of the year (2015). In 2015, her net Schedule C income was $120,000. This was her only source of income. This year, Hope is considering setting up a retirement plan.

What is the maximum amount Hope may contribute to the self-employed plan in each of the following situations?

a.

She sets up a SEP IRA.

b.

She sets up an individual 401(k).

Penny is 57 years old and she participates in her employer’s 401(k) plan. During the year, she contributed $2,000 to her 401(k) account. Penny’s AGI is $27,000 after deducting her 401(k) contribution.

What is Penny’s 2015 saver’s credit in each of the following alternative scenarios?

a.

Penny is not married and has no dependents.

b.

Penny files as a head of household and she has three dependents.

c.

Penny files as a head of household and she has one dependent.

d.

Penny is married and files a joint return with her husband. They have three dependents.

e.

Penny files a separate tax return from her husband. She claims two dependent children on her return.