Ken is a self-employed architect in a small firm with four employees: himself, his office assistant, and
Question:
a) Is he eligible to establish an SEP plan?
b) Is he required to cover his employees under the plan? Why or why not?
c) If his employees must be covered, what is the maximum amount that can be contributed on their behalf?
d) If the employees are not covered, what is the maximum amount Ken can contribute for himself?
e) If Ken is required to contribute for his employees and chooses to contribute the maximum amount, what is the maximum amount Ken can contribute for himself? (Hint: Calculate the employee amounts first.) Ignore any changes in Ken’s self-employment tax.
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Related Book For
Fundamentals Of Taxation 2015
ISBN: 9781259293092
8th Edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone
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