Tessa is a self-employed CPA whose 2014 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 2014?
A)$100,000
B)$80,000
C)$65,000
D)$52,000

Question

Quizplus · Accepted Answer

For 2014, the maximum contribution to a Keogh plan is the lesser of $52,000 or 25% of net earnings. Since $400,000 x 25% = $100,000, the contribution is capped at $52,000.

Tessa Is a Self-Employed CPA Whose 2014 Net Earnings from Her