Susan Is a Self-Employed Accountant with a Qualified Defined Contribution

question 138

Multiple Choice

Susan is a self-employed accountant with a qualified defined contribution plan (a Keogh plan) .She has the following income items for the year: $$\begin{array} { l r } \text { Earned income from self-employment } & \$ 50,000 \\\text { Dividend income } & 8,000 \\\text { Interest income } & 2,000 \\\text { Net short-term capital gain } & 12,000 \\\text { Adjusted gross income } & \$ 72,000\end{array}$$ ? What is the maximum amount Susan can deduct as a contribution to her retirement plan in 2017, assuming the self-employment tax rate is 15.3%?

• A)$9,235.
• B)$12,000.
• C)$46,000.
• D)$46,468.
• E)None of the above.

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Definitions:

Certificates of Deposit

Fixed-term financial instruments issued by banks that offer a fixed interest rate in exchange for keeping the deposit untouched for a predetermined period.

Orders to Pay

Instructions typically issued by a debtor authorizing their bank to pay a specified amount of money to a creditor on a certain date.

Certificate of Deposit

A Certificate of Deposit is a financial product offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to its customers.