Which of the Following Statements Is Correct

question 2

Multiple Choice

Which of the following statements is correct?

• A)Contributions to SEP plans by self-employed taxpayers are generally limited to the lesser of 15 percent of their net earned income (before the SEP deduction) or $45,000.
• B)The contribution limits for SEPs are the lesser of 25 percent of net self-employment income after the deduction for the contribution to the SEP or $55,000 for a self-employed taxpayer.
• C)Employees may elect to make annual contributions to 401(k) plans up to the lesser of 15 percent of their net earned income (before the 401(k) deduction) or $54,000.
• D)The contribution limits for SEPs are a maximum of $18,500 ($24,500 for taxpayers 50 or older).