Which of the following statements is correct? a. The contribution limits for SEPs are a maximum of $19,500 ($25,500 for taxpayers 50 or older). b. Employees may elect to make annual contributions to 401(k) plans up to the lesser of 15 percent of their net earned income (before the 401(k) deduction) or $57,000. c. The contribution limits for SEPs are the lesser of 25 percent of net self-employment income after the deduction for the contribution to the SEP or $57,000 for a self-employed taxpayer. d. Contributions to SEP plans by self-employed taxpayers are generally limited to the lesser of 15 percent of their net earned income (before the SEP deduction) or $45,000.
Which of the following statements is correct? a. The contribution limits for SEPs are a maximum of $19,500 ($25,500 for taxpayers 50 or older). b. Employees may elect to make annual contributions to 401(k) plans up to the lesser of 15 percent of their net earned income (before the 401(k) deduction) or $57,000. c. The contribution limits for SEPs are the lesser of 25 percent of net self-employment income after the deduction for the contribution to the SEP or $57,000 for a self-employed taxpayer. d. Contributions to SEP plans by self-employed taxpayers are generally limited to the lesser of 15 percent of their net earned income (before the SEP deduction) or $45,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Which of the following statements is correct?
| a. |
The contribution limits for SEPs are a maximum of $19,500 ($25,500 for taxpayers 50 or older).
|
|
| b. |
Employees may elect to make annual contributions to 401(k) plans up to the lesser of 15 percent of their net earned income (before the 401(k) deduction) or $57,000.
|
|
| c. |
The contribution limits for SEPs are the lesser of 25 percent of net self-employment income after the deduction for the contribution to the SEP or $57,000 for a self-employed taxpayer.
|
|
| d. |
Contributions to SEP plans by self-employed taxpayers are generally limited to the lesser of 15 percent of their net earned income (before the SEP deduction) or $45,000.
|
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