Chapter 14 by gegeshandong


									Chapter 14
In a previous chapter it was suggested that AGI was the closest gauge of the
taxpayers' disposable income for the year. Continuing with that thought, AGI is
the closest gauge of a taxpayer's disposable income after the decision, when
appropriate, to contribute to their retirement plan. Many taxpayer's are covered
under pension plans at work but still others qualify for individual retirement
accounts (IRAs) and contributions to self-employed retirement plans. One gauge
of the propensity for taxpayer's to save for retirement is the use they make of
these non-employer retirement options. In particular, the IRA and self-employed
plan contributions suggest retirement planning on the part of individuals that
either have no retirement plan through an employer or whose income is still in
the range that would allow IRA contributions even though they participate in an
employer's retirement plan. Using Internet resources only can you determine
the following:
1 Dollars of IRA contributions per return claiming IRA deductions in 1996
2 Dollars of Self-employment contributions claiming Self-employment
    deductions in 1996
3 The percentage of returns claiming IRA deductions to total returns filed for
4 The percentage of returns claiming self-employed contributions for 1996
5 The percentage of returns reporting business income or loss for 1996.

Summarize what you have discovered in terms of how well taxpayers are using
IRAs and self-employed plans and what that means for the overall savings rate in
America. Based on your information would you suggest that taxpayer's may
need more incentives to save?

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