Kathy is 60 years of age and self-employed. During 2017, she reported $100,000 o

Question

Kathy is 60 years of age and self-employed. During 2017, 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) for 2017?

Kathy is 48 years of age and self-employed. During 2017, 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) for 2017?

Kathy is 60 years of age and self-employed. During 2017, she reported $500,000 of revenues and $100,000 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) for 2017?

Kathy is 48 years of age and self-employed. During 2017, she reported $500,000 of revenues and $100,000 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)?

Explanation / Answer

1:- She may contribute the lesser of (1) $49,000 or (2) $27,582 [($60,000 x .9235 x 20%) + $16,500]. Because she is at least 50 years of age at the end of the year, she may contribute an additional $5,500 as a catch-up adjustment.

2):- She may contribute the lesser of (1) $49,000 or (2) $27,582 [($60,000 x .9235 x 20%) + $16,500]. Because she is not at least 50 years of age at the end of the year, she does not qualify for a catch-up contribuation.

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