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Charlie is a single taxpayer with income of $107,000 which includes $22,500 of interest income. Contributions to Coverdell educational savings accounts are phased out between $95,000 and $110,000. What is the maximum contribution Charlie can make to an educational savings account?

Respuesta :

Answer:

Modified Adjusted Gross Income = $107,000

Income Limit for Contributions = $97,000

Amount that can be contributed = NIL

Explanation:

Charlie is a single taxpayer with income of $107,000 which includes $22,500 of interest income.

Contributions to Coverdell educational savings accounts are phased out between $95,000 and $110,000.

What is the maximum contribution Charlie can make to an educational savings account?

Modified Adjusted Gross Income = $107,000

Income Limit for Contributions = $97,000

Amount that can be contributed = NIL

The IRS states that ''Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions.'' hence, Charlie cannot make contributions

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