Puri is a self-employed Spanish teacher.Her earnings from self-employment before the Keogh deduction but after deducting half of the self-employment tax are $120,000.What is her maximum deductible Keogh contribution for 2016?

Question

Quizplus · Accepted Answer

For 2016, the maximum deductible contribution to a Keogh plan is 20% of net earnings from self-employment. After deducting half of the self-employment tax, Puri's earnings are $120,000, so 20% of $120,000 is $24,000.

Puri Is a Self-Employed Spanish Teacher