Fred Is a Self-Employed Accountant with Gross Earned Income of $140,000

question 59

Multiple Choice

Fred is a self-employed accountant with gross earned income of $140,000 per year (after the deduction for one-half of any self-employment tax) .He has a profit sharing plan (i.e., defined contribution plan) .What is the maximum amount Fred can contribute to his retirement plan?

• A)$28,000
• B)$35,000
• C)$40,000
• D)$140,000
• E)None of these

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Definitions:

Payoff

The return or reward received from an investment or action, often analyzed in game theory and economics.

Proportion

A portion, fraction, or quantity that is seen in contrast to the entire entity.

Equilibrium

A condition or state where all acting influences are balanced, particularly in a market when supply equals demand.

Penalty Kick

A penalty kick in economics might refer metaphorically to an opportunity to score or gain significantly with little opposition, though it's primarily a sports term.