Choice "B" is correct. In 2014, taxpayers can contribute and deduct up to $5,500 to an IRA. For couples filing a joint return, where at least one spouse is an active participant in a retirement plan, the deductible portion is phased out. For a spouse who is an active participant, the phase-out range in 2014 begins at $95,000. For a spouse who is not an active participant, but is married to someone who is, the phase-out range in 2014 begins at $178,000. The Smith's income is below both phase-out ranges, so they can each deduct the full $5,000 contributed, or $10,000 in total.
Choices "a", "d", and "c" are incorrect, per the above explanation.