Norman Stonewell reports a salary of $60,000 this year on a joint return. He also reports $300,000
Question:
Norman Stonewell reports a salary of $60,000 this year on a joint return. He also reports
$300,000 in net royalty income (i.e., net of business deductions and self-employment tax), from two books he wrote. Norman is age 48, and his wife Betty is age 50.
a. Is Norman eligible to participate in a corporatate 401(k) plan, a Solo 401(k)
plan and a Roth IRA in the same year?
b. What are the maximum contribution and deduction amounts available to Norman if he maintains a Solo 401 (k)
plan?
c. When must the Solo 401(k) plan be opened and the contribution made?
d. If Betty is a nonworking spouse, what is the maximum traditional IRA contribution allowable for both spouses?
e. When must the traditional IRA accounts be opened and the contribution made?
Step by Step Answer:
a Norman is eligible to participate in a corporate 401k plan if his employer offers one and he meets the plans eligibility requirements He can also es...View the full answer
CCH Federal Taxation Basic Principles 2020
ISBN: 9780808051787
2020 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
