Donna, age 50, is single and earns $40,000 annually. She is covered under her employer's retirement plan. Donna would like to start a traditional IRA and contribute $4,000 this year

Which of the following describes her ability to establish a traditional IRA and the tax treatment of her contribution?
A) Her contribution is fully tax deductible.
B) Her contribution is partially tax deductible.
C) No portion of the contribution is tax deductible.
D) Donna is not eligible to establish a traditional IRA, so no contribution can be made.

Answer: A

Business

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