Kathy is 48 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)?

Question

Quizplus · Accepted Answer

She may contribute the lesser of (1) $53,000 (2) $29,152 [[($60,000 - (60,000 × .9235 × .153 × .5)) × 20%] + $18,000]. Because she is not at least 50 years of age at the end of the year, she does not qualify for a catch-up contribution.

Kathy Is 48 Years of Age and Self-Employed