Scott and Allison are married and file a joint tax return. Scott is a graduate student who works part time and earned $15,000 in 2015. He is not eligible to participate in his employer's retirement plan because he is a part-time worker. Allison is a high school teacher who earned $60,000 in 2015 and is an active participant in the school district's retirement plan. Assume you are a financial planner and the couple asks for your advice. Based on the preceding facts, answer each of the following questions.
a. Is Scott eligible to establish and deduct contributions to a traditional IRA? Explain your answer.
b. Is Allison eligible to establish and deduct contributions to a traditional IRA? Explain your answer.
c. Assume that Scott graduates and the couple's modified adjusted gross income is $130,000 in 2015. Both Scott and Allison participate in their employers' retirement plans. Can either Scott or Allison, or both, establish a Roth IRA? Explain your answer.
d. Explain to Scott and Allison the advantages of a Roth IRA over a traditional IRA.