Question

The phase-out for contributions allowed to Roth IRAs is dependent upon the taxpayer's (1) (2) and MAGI. (Enter only one word per blank.)

a) Filing; AGI
b) Marital; Income
c) Age; Taxable
d) Deductible; Employment

Answer 1

The correct answer is that the phase-out for Roth IRA contributions depends on the taxpayer's Marital status and MAGI. Option (b): Marital; Income is the correct fill-in response for the student's question.

Step-by-step explanation:

The phase-out for contributions allowed to Roth IRAs is dependent upon the taxpayer's Marital status and MAGI (Modified Adjusted Gross Income). Therefore, the correct response to fill in the blanks for the student's question is option (b): Marital; Income. The Roth IRA is a retirement savings vehicle where contributions are made with after-tax dollars, and qualified distributions are tax-free. The eligibility to contribute to a Roth IRA is determined by an individual's filing status and their modified adjusted gross income. As income rises, the allowable contribution begins to phase out until it is completely phased out at certain high income levels, which vary annually.