LO.5 In 2010, Susans sole proprietorship earns $260,000 of self-employment net income (after the deduction for one-half
Question:
LO.5 In 2010, Susan’s sole proprietorship earns $260,000 of self-employment net income
(after the deduction for one-half of self-employment tax).
a. Calculate the maximum amount that Susan can deduct for contributions to a defined contribution Keogh plan.
b. Suppose Susan contributes more than the allowable amount to the Keogh plan.
What are the tax consequences to her?
c. Can Susan retire and begin receiving Keogh payments at age 55 without incurring a penalty?
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Related Book For 
South Western Federal Taxation 2011 Taxation Of Business Entities
ISBN: 9780538498616
14th Edition
Authors: James E. Smith, William A. Raabe, David M. Maloney
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