A. For the 2023 tax year, the maximum contribution limit to a Traditional IRA for individuals under the age of 50 is $6,500. Since Phil is not covered by a retirement plan at work, he can fully deduct his contribution up to the limit, regardless of their income. Naoko, who is covered by a retirement plan at work, can also fully deduct her contribution because their combined income is below the phase-out range for married couples filing jointly where one spouse is covered by a workplace retirement plan. Phil: $6,500 Naoko: $6,500 b. For the 2023 tax year, the phase-out range for a taxpayer not covered by a workplace retirement plan but whose spouse is covered starts at $116,000 and ends at $136,000 for married couples filing jointly. Since Phil and Naoko's combined income is $131,000 ($60,000 from Phil and $71,000 from Naoko), they are within the phase-out range. Phil, who is not covered by a retirement plan, can still deduct the full amount of his contribution because the phase-out range applies to Naoko, the spouse who is covered by a retirement plan. Naoko's ability to deduct her Traditional IRA contribution will be limited based on the phase-out calculations. Phil: $6,500 (full contribution amount since he's not covered by a plan) Naoko: The exact deductible amount for Naoko would require a calculation based on what?

For Naoko, who is covered by a retirement plan at work, the deductible amount of her Traditional IRA contribution is subject to a phase-out based on their combined modified adjusted gross income (MAGI). Since their combined income is $131,000, which falls within the phase-out range of $116,000 to $136,000 for 2023, Naoko's deduction will be limited. To calculate the exact deductible amount for Naoko, you would use the following steps: 1. **Determine the phase-out range:** For 2023, the phase-out range for a married couple filing jointly where one spouse is covered by a retirement plan is $116,000 to $136,000. 2. **Calculate the amount over the lower limit of the phase-out range:** Subtract $116,000 from their combined income of $131,000, which equals $15,000. 3. **Determine the phase-out percentage:** Divide the amount over the lower limit ($15,000) by the total phase-out range ($20,000, which is $136,000 - $116,000). This gives you 0.75 or 75%. 4. **Calculate the reduced deductible amount:** Multiply Naoko's maximum contribution limit ($6,500) by the phase-out percentage (75%). This equals $4,875, which is the amount of her contribution that is not deductible. 5. **Determine the deductible amount:** Subtract the non-deductible portion ($

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