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

question 15

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: $\begin{array}{lr}\text { Earned income from self-employment } & \$ 50,000 \\\text { Dividend income } & 8,000 \\\text { Interest income } & 2,000 \\\text { Net short-term capital gain } & 12,000 \\\text { Adjusted gross income } & \$ 72,000\end{array}$ What is the maximum amount Susan can deduct as a contribution to her retirement plan in 2014,assuming 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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Definitions:

Myelin

A fatty material that encases the axons of some neurons, serving as an insulating layer that enhances the speed and efficiency of electrical signal transmission in the nervous system.

Neuron

A specialized cell transmitting nerve impulses; a nerve cell.

Insulation

Insulation refers to materials used to reduce the rate of heat transfer, or the method of installing such materials to help maintain a desired temperature in buildings or protective clothing.

Proximate Explanation

An explanation that focuses on the immediate cause or mechanism of a biological trait or behavior.