A retirement plan that allows a self-employed person,or people working for a small business,to make larger tax-deductible contributions to a retirement account is called:
A) a 401(k) plan.
B) an individual retirement account.
C) a simplified employee pension plan.
D) a profit-sharing Keogh plan.

Question

Quizplus · Accepted Answer

A simplified employee pension plan (SEP) is a retirement plan that allows self-employed individuals and small-business owners to make tax-deductible contributions to their own and their employees' accounts. This plan allows for larger contributions than an individual retirement account (IRA) and does not have the administrative costs associated with a 401(k) plan. A profit-sharing Keogh plan is also a retirement plan for self-employed individuals, but it has more complex rules and administrative requirements than a SEP plan. Therefore, the best choice for a self-employed individual or small-business owner looking to make large tax-deductible contributions would be a SEP plan.

A Retirement Plan That Allows a Self-Employed Person,or People Working