Tessa is a self- employed CPA whose 2018 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 2018?

Question

Quizplus · Accepted Answer

In 2018, the maximum contribution to a Keogh plan is the lesser of $55,000 or 25% of net earnings. Since 25% of $400,000 is $100,000, the maximum contribution is capped at $55,000.

Tessa Is a Self- Employed CPA Whose 2018 Net Earnings