Claire is a self-employed individual who owns and runs Claire’s Creations, LLC. In 20X4 she had $225,000 in net self-employment earnings, including a deduction for 50% of self-employment tax, prior to any Keogh deduction. Claire has a defined contribution, stock bonus Keogh plan. What is the highest deductible Keogh contribution Claire can make for the 20X4 tax year? Assume no excess contribution carryover from prior years.
ANSWER
A Keogh defined contribution plan contribution is limited to the lesser of $52,000 for 20X4 OR 100% of the participant's earned income for the year.
Hence, highest deductible contribution is $52,000
---------------------------------------------------------------------
DEAR STUDENT,
If you have any query or any Explanation please ask me in
the comment box, i am here to helps you.please give me positive
rating.
*****************THANK YOU**************
Get Answers For Free
Most questions answered within 1 hours.