Which of the Following Is True Regarding an SEP

question 1

Multiple Choice

Which of the following is true regarding an SEP?

• A)Cannot discriminate in favor of highly compensated employees.
• B)Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $54,000.
• C)Self-employed individuals cannot create and contribute to an SEP.
• D)The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation.

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Definitions:

Diffusion

The process through which new ideas, products, or practices spread within a population or society.

Expected Rate of Return

The anticipated amount of profit or loss an investment is likely to generate, typically expressed as a percentage of the investment's initial cost.

R&D Expenditure

Refers to the funds allocated by a business or government for the purpose of researching and developing new products, processes, or services.

Added Profit

The additional profit gained from making changes to the production process or selling strategy, beyond the usual or expected profit levels.