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Scenario $2$: Self$-$Employed Retirement Plan Options

Sole Proprietorship Business Income: $$140,000$

Age: $48$

No existing retirement plans

Interest and Dividend Income: $$800$

Itemized Deductions: $$18,000$

Allowable deduction for self$-$employment tax: $$11,000$

Questions:

Compare the potential contribution limits and impact on taxable income for:

SEP IRA

Solo $401($k$)$

Discuss factors to consider when choosing the right plan.