Kathy is 60 years of age and self-employed. During the year she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?
A) $28,652
B) $34,152
C) $52,000
D) $57,500

Question

Quizplus · Accepted Answer

Kathy can contribute up to 20% of her net self-employment income ($60,000) as an employer contribution and $30,000 as an employee contribution (since she is over 50), totaling $34,152.

Kathy Is 60 Years of Age and Self-Employed