On February 15, 2016, Jamal, who is single and age 30, establishes a traditional IRA and contributes $5,500 to the account. Jamal’s adjusted gross income is $67,000 in 2015 and $57,000 in 2016. Jamal is an active participant in an employer-sponsored retirement plan.
a. What amount of the contribution is deductible? In what year is it deductible?
b. How is the deduction (if any) reported (i.e., for AGI or from AGI)?
c. How would your answer to Part a change, if at all, if Jamal were not an active participant in an employer-sponsored retirement plan?
d. How would your answer to Part a change if Jamal were married and files a joint return with his spouse, who has no earned income? (Assume their combined AGI is $85,000.)