Reggie is a self-employed taxpayer who turns 59 years old at the end of the year (2014).

Question:

Reggie is a self-employed taxpayer who turns 59 years old at the end of the year (2014). In2014, his net Schedule C income was $300,000. This was his only source of income. This year, Reggie is considering setting up a retirement plan. What is the maximum amount he may contribute to the self-employed plan in each of the following situations?
a. He sets up a SEP IRA.
b. He sets up an individual 401(k).