Tessa is a self-employed CPA whose 2015 net earnings from her business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes)is $400,000.What is the maximum contribution that Tessa can make on her behalf to her H.R.10 (Keogh)plan in 2015?
A)$100,000
B)$80,000
C)$66,250
D)$53,000

Question

Quizplus · Accepted Answer

For 2015, the maximum contribution to a Keogh plan is the lesser of $53,000 or 25% of net earnings. Since $53,000 is less than 25% of $400,000, the maximum contribution is $53,000.

Tessa Is a Self-Employed CPA Whose 2015 Net Earnings from Her