John and Elizabeth have come to you for the following tax advice. They file jointly and have an Adjusted Gross Income of $150,000. They are both 52 years-old and active participants in their employer’s retirement plan. They are trying to decide whether they should contribute to a Traditional or Roth IRA. They also want to know the maximum they can contribute to either the Traditional IRA or the Roth IRA. When researching these questions refer to your text book and Pub. 590A. Page 5 of Pub. 590A is extremely helpful.

A. What is the maximum they can contribute to either IRA? Note where you found your answer either in Pub. 590A or your text book.

B. If they contribute to the traditional IRA how much would they be able to deduct on their 2018 tax return? Note where you found your answer either in Pub. 590A or your text book.

C. If they contribute to the Roth IRA how much would they be able to deduct on their 2018 tax return? Note where you found your answer either in Pub. 590A or your text book.

D. Would you recommend that they contribute the maximum amount to the traditional IRA or the Roth IRA for 2018? Explain to John and Elizabeth the reasons for your recommendations.