questio 17 **Kathy's 401(k) Contribution Calculation***Context:* Kathy is 60 years of age and self-employed. In 2023, she reported $504,000 of revenues and $100,800 of expenses for her self-employment activities. Kathy has no other retirement accounts. You are to determine the maximum amount she can contribute to an individual 401(k) for the year 2023, assuming she pays $30,597 in self-employment taxes for the year.**Calculation:**1. **Net Income from Self-Employment**: - Revenue: $504,000 - Expenses: $100,800 - Net Income: $504,000 - $100,800 = $403,2002. **Self-Employment Tax Deduction**: - Self-employment tax paid: $30,5973. **Maximum 401(k) Contribution Calculation**: - Kathy can contribute both as an employee and an employer. - **Employee Contribution Limit**: For 2023, Kathy, being over 50, can contribute up to $30,000 as a catch-up contribution. - **Employer Contribution**: - Based on net earnings from self-employment, reduced by half of her self-employment tax. - Net earnings considered for employer contribution: $403,200 - ($30,597 / 2) = $387,901.50 - Employer contributions can be up to 25% of this adjusted net earnings. - Calculate 25% of $387,901.50.**Note:** Round your final answer to the nearest whole number.**Multiple Choice Options:**- $100,080- $73,500- $66,000- $92,569Choose the correct contribution limit from the options above.

For the tax year 2023, the maximum contribution by self-employed as a profit sharing contribution is…

Kathy is 60 years of age and self-employed. During 2023, she reported $504,000 of revenues and $100,800 of expenses relating to her self- employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k) for 2023? Assume she pays $30,597 in self-employment for 2023. Note: Round your final answer to the nearest whole number.

Kathy is 60 years of age and self-employed. During 2023, she reported $504,000 of revenues and $100,800 of expenses relating to her self- employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k) for 2023? Assume she pays $30,597 in self-employment for 2023. Note: Round your final answer to the nearest whole number.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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