Elvira is a self-employed taxpayer who turns 42 years old at the end of the year (2014). In 2014, her net Schedule C income was $120,000. This was her only source of income. This year, Elvira is considering setting up a retirement plan. What is the maximum amount Elvira may contribute to the self-employed plan in each of the following situations?
a. She sets up a SEP IRA.
b. She sets up an individual 401(k).