Mrs. Connelly, a self-employed individual, maintains a defined-contribution Keogh plan. Regardless of the amount of her self-employment income, Mrs. Connelly may contribute $57,000 to the Keogh plan in 2020.

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Quizplus · Accepted Answer

The maximum contribution to a Keogh plan (or a solo 401(k) plan, which has largely replaced the Keogh for new accounts) for 2020 is indeed $57,000, but this is contingent on having sufficient self-employment income. Contributions are typically limited to a percentage of earned income up to that maximum, not a flat $57,000 regardless of income level.

Mrs Connelly, a Self-Employed Individual, Maintains a Defined-Contribution Keogh Plan