An individual with an annual income of $25,000 can make a maximum deductible IRA contribution of what amount?

The maximum deductible IRA contribution for an individual is influenced by their income level and filing status. As of the applicable rules, for a taxpayer under the age of 50, the basic limit for IRA contributions is $6,000, but the ability to deduct that amount may be phased out or reduced based on income levels and other factors, such as participation in an employer-sponsored retirement plan.

In the context of this question, with an annual income of $25,000, the individual cannot make the maximum contribution that someone with a higher income might be able to deduct. The figures presented suggest considerations or restrictions that apply to those in specific income brackets. Taking into account the income level and applicable regulations, a maximum deductible contribution of $2,500 would likely reflect limitations based on adjusted income metrics established by the IRS, indicating a more tailored approach to lower-income earners.

This aligns with general IRS guidelines for IRAs and health savings accounts, where contributions and deductibility may be limited by income brackets, thereby allowing adjustments for taxable income. Hence, the choice of $2,500 represents a reasonable conclusion based on a thorough understanding of how income affects IRA deductions for individuals within that earning range.