Janet, age 29, is unmarried and is an active participant in a qualified deductible (traditional) IRA plan.

Question:

Janet, age 29, is unmarried and is an active participant in a qualified deductible (traditional) IRA plan. Her modified AGI is $62,000 in 2014.
a. Calculate the amount Janet can contribute to the IRA and the amount she can deduct.
b. Assume instead that Janet is a participant in a SIMPLE IRA and that her compensation for the year is $61,000. Janet elects to contribute 4% of her compensation to the account, while her employer contributes 3%. What amount will be contributed for 2014? What amount will be vested?