Ann is the sole owner of a computer store and established a simplified employee pension plan (SEP) for herself and her two full-time employees. Her net self-employment income for the year is $70,000. The maximum amount she can contribute to her SEP is
A)$9,130
B)$10,500
C)$14,000
D)$17,500
E)$49,000

Question

Quizplus · Accepted Answer

The maximum amount that Ann can contribute to her SEP is 25% of her net self-employment income, up to a maximum of $56,000 for 2019. Since her net self-employment income is $70,000, 25% of that is $17,500, which is more than the maximum amount allowed. Therefore, the maximum amount Ann can contribute is $14,000.

Ann Is the Sole Owner of a Computer Store and Established