Xavier is a self-employed plumber.His earnings from self-employment,before the Keogh deduction but after deducting half of the self-employment tax,are $80,000.What is his deductible Keogh contribution for 2014?

Question

Quizplus · Accepted Answer

For 2014, the maximum deductible contribution to a Keogh plan is 20% of self-employment income after deducting half of the self-employment tax. Therefore, 20% of $80,000 is $16,000.

Xavier Is a Self-Employed Plumber