As a 19-year-old taxpayer, what is the maximum that Mahmed can invest in his Roth IRA for tax year 2017?

As a 19-year-old taxpayer, what is the maximum that Mahmed can invest in his Roth IRA for tax year 2017?

• A. $6,000
• B. $4,000
• C. $5,500
• D. $2,000

Answer: (B)

The correct maximum that Mahmed can invest in his Roth IRA for tax year 2017 is $5,500. For the tax year 2017, individuals under the age of 50 are permitted to contribute up to $5,500 to a Roth IRA, as long as they have earned income at least equal to the contribution amount. Individuals aged 50 and older have a catch-up contribution allowance that increases the total contribution limit, but that does not apply to Mahmed as a 19-year-old. The amounts listed in the other choices do not align with the contribution limits set forth by the IRS for that specific tax year. Therefore, it’s essential to recognize the correct limit to accurately plan for retirement savings through a Roth IRA.

The correct maximum that Mahmed can invest in his Roth IRA for tax year 2017 is $5,500. For the tax year 2017, individuals under the age of 50 are permitted to contribute up to $5,500 to a Roth IRA, as long as they have earned income at least equal to the contribution amount. Individuals aged 50 and older have a catch-up contribution allowance that increases the total contribution limit, but that does not apply to Mahmed as a 19-year-old.

The amounts listed in the other choices do not align with the contribution limits set forth by the IRS for that specific tax year. Therefore, it’s essential to recognize the correct limit to accurately plan for retirement savings through a Roth IRA.