Rodney, age 35, who earned $40,000 in 2011 and did not participate in an employer retirement plan, has a nonworking spouse. They filed a joint income tax return. Which of the following statements is TRUE?

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Rodney, age 35, who earned $40,000 in 2011 and did not participate in an employer retirement plan, has a nonworking spouse. They filed a joint income tax return. Which of the following statements is TRUE?

A) Rodney could establish separate IRAs for himself and his wife and contribute and deduct $10,000 to his IRA and $5,000 to his wife’s IRA.

B) Rodney could establish an IRA for himself and contribute any amount he wishes to it.

C) Rodney could establish a separate IRA for himself and another for his wife and could deduct a contribution of up to $10,000 for 2011.

D) Rodney could establish an IRA for himself but not for his wife because she is unemployed. However, because he is married, he could contribute and deduct up to twice the maximum for an individual IRA, or $10,000.

Answer: C) Rodney could establish a separate IRA for himself and another for his wife and could deduct a contribution of up to $10,000 for 2011.

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