Caribon Cruise Tours has a traditional 401(k) plan for employees. Last year, payroll for employees covered under the plan was $500,000 and employee elective deferrals amounted to $100,000. Which of the following is true?

Question 43 options:

	Caribon Cruise Tours can deduct up to $150,000 for federal income tax purposes
	Caribon Cruise Tours can deduct no more than $125,000 for federal income tax purposes
	employees paid income and payroll taxes on the amounts they chose to defer
	a and c
	a and b