Question

Barbara is a single taxpayer who had a 2021 adjusted gross income of $25,000 and contributed $4,000 to her traditional IRA. Assuming she has a $2,000 income tax liability for the year, what is her maximum retirement contribution savings credit?.

Answer 1

Based on the information given her maximum retirement contribution savings credit is $200.

Since Barbara Adjusted gross income is $25,000 which is more than the required amount of $21,251.

Hence Barbara can only deduct 10 percent of  the first amount that she contributed to her individual retirement account  which is $2,000.

Maximum retirement contribution:

Maximum retirement contribution=10%×$2,000

Maximum retirement contribution=$200

Inconclusion  her maximum retirement contribution savings credit is $200.

Learn more about maximum retirement contribution here:https://brainly.com/question/25655547