43-Hour Federal Qualifying Education Practice Test 2025 - Free Federal Education Practice Questions and Study Guide

The correct answer is that Janet can make a deductible contribution of $0 to her traditional IRA due to her modified adjusted gross income (MAGI). The IRS has specific income limits that determine the ability to deduct contributions to a traditional IRA.

For the year 2023, if an individual's modified adjusted gross income exceeds certain thresholds, the deductible amount for contributions to a traditional IRA can be reduced or eliminated entirely. This often applies to individuals who are active participants in an employer-sponsored retirement plan.

In this case, Janet's MAGI likely surpasses the set limit established by the IRS, which would result in her being unable to deduct any contributions to her traditional IRA. Thus, her deductible contribution is $0 because her income level does not qualify her for any tax deduction allowed for IRA contributions.

Understanding these income limits is crucial for taxpayers like Janet when planning their retirement savings and tax strategies, ensuring that they are compliant with IRS regulations while maximizing their tax benefits.