In 2021, Megans sole proprietorship earns $300,000 of self-employment net income (after the deduction for one-half of

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In 2021, Megan’s sole proprietorship earns $300,000 of self-employment net income (after the deduction for one-half of self-employment tax).

a. Calculate the maximum amount that Megan can deduct for contributions to a defined contribution Keogh plan.

b. Suppose Megan contributes more than the allowable amount to the Keogh plan. What are the consequences to her?

c. Can Megan retire and begin receiving Keogh payments at age 58 without incurring a penalty? Explain.

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South-Western Federal Taxation 2022 Individual Income Taxes

ISBN: 9780357519073

45th Edition

Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman

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Question Posted: Jul 26, 2022 01:02 AM

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In 2021, Megans sole proprietorship earns $300,000 of self-employment net income (after the deduction for one-half of

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South-Western Federal Taxation 2022 Individual Income Taxes

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