Ken is a self-employed architect in a small firm with four employees: himself, his office assistant, and two drafters, all of whom have worked for Ken full-time for the last four years. The office assistant earns $34,000 per year and each drafter earns $44,000. Ken's net earnings from self-employment (after deducting all expenses and one-half of self-employment taxes) are $314,000. Ken is considering whether to establish an SEP plan and has a few questions. Assume that all the employees are at least 21 years old. Required: a. Is he eligible to establish an SEP plan? Yes NO b. Is he required to cover his employees under the plan? Yes No c. If his employees must be covered, what is the maximum amount that can be contributed on their behalf? Lesser of $57,000 or 25% of employee earnings Greater of $56,700 or 25% of employee earnings Only 25% of employee earnings Only $56,700 No contribution as Ken is not qualified to have an SEP Plan d. If the employees are not covered, what is the maximum amount Ken can contribute for himself? Lesser of $56,700 or 25% of employee earnings Greater of $56,700 or 25% of employee earnings Only 25% of employee earnings Only $56,700 No contribution as Ken is not qualified to have an SEP Plan . If Ken is required to contribute for his employees and chooses to contribute the maximum amount, what is the maximum amount Ken can contribute for himself? (Hint: Calculate the employee amounts first.) Ignore any changes in Ken's self-employment tax. Maximum contribution S 54,000 %