Question
Marcus is unmarried and age 32. Even though she participates in an employer-sponsored retirement plan, Marcus contributed $4,200 to a traditional IRA during the year.
Marcus is unmarried and age 32. Even though she participates in an employer-sponsored retirement plan, Marcus contributed $4,200 to a traditional IRA during the year. Marcus files as a head of household, her AGI before the contribution is $43,000, and her marginal tax rate is 12 percent.
EXHIBIT 13-8 2022 Applicable Percentages for Saver's Credit by Filing Status and AGI
| Applicable Percentage | Joint Filers AGI | Heads of Household AGI | All Other Filers AGI |
|---|---|---|---|
| 50% | $0 to $41,000 | $0 to $30,750 | $0 to $20,500 |
| 20 | $41,001 to $44,000 | $30,751 to $33,000 | $20,501 to $22,000 |
| 10 | $44,001 to $68,000 | $33,001 to $51,000 | $22,001 to $34,000 |
| No credit available | Above $68,000 | Above $51,000 | Above $34,000 |
What is the after-tax cost of her $4,200 traditional IRA contribution?
After Tax Cost?
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Advanced Financial Accounting
Authors: Theodore E. Christensen, David M. Cottrell, Cassy Budd
13th International Edition
1265042616, 9781265042615
