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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 1996 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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