Under a SEP, an Employee

question 5

Multiple Choice

Under a SEP, an employee

• A) is not allowed to make contributions.
• B) can contribute up to $6,000 per year.
• C) is not taxed until his or her contributions are withdrawn.
• D) can defer taxes with contributions.

---

Definitions:

Informed Party

An individual or entity possessing knowledge or information that gives them an advantage in transactions or decisions.

True Risks

The actual risks associated with an investment, activity, or decision, taking into account all factors and potential outcomes.

Generous Tip

A sum of money given to service workers that is significantly higher than the standard tipping percentage, often as a reward for exceptional service.

Signaling Mechanism

A method through which parties communicate information indirectly or directly to influence perceptions and decisions of others, often used in markets and negotiations.