Example: John and Mary file a joint application, with a modified adjusted gross income (MAGI) of $ 60,000. John didn’t work 2020. Mary earned $ 50,000. An IRA contribution of $ 6,000 can be made to each IRA account for 2020.
Example: Joan, who registers as a single person, earned $ 30,000 in 2020. Her father contributed $ 6,000 to her IRA. $ 6,000 is the upper limit for contributions in 2020. By paying $ 6,000 into her traditional IRA, she gets a $ 1,000 savings loan. Its contribution is not taxable, as contributions to traditional IRAs are not taxable. The loan reduces her federal tax liability by $ 1,000. If the total gifts her father gave in 2020 do not exceed $ 15,000, it will not affect his lifetime property tax allowance.