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

question 20

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: $$\begin{array} { l r } \text { Earned income from self-employment } & \$ 50,000 \\\text { Dividend income } & 8,000 \\\text { Interest income } & 2,000 \\\text { Net short-term capital gain } & \underline { 12,000 } \\\text { Adjusted gross income } &\underline { \underline { \$ 72,000 }} \\\end{array}$$ What is the maximum amount that Susan can deduct as a contribution to her retirement plan in 2019, assuming that the self-employment tax rate is 15.3%?

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

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