Question

Kathy is 48 years of age and self-employed. During 2018 she reported $538,000 of revenues and $107,600 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Answer 1

Contribute to individual 401(k) = $61,000

Step-by-step explanation:

Given:

Revenue = $538,000

Expenses = $107,600

Find:

Contribute to individual 401(k)

Computation:

Contribute to individual 401(k) = $55,000

Kathy is younger then 50 years so, She have t pay $6,000 more:

So,

Contribute to individual 401(k) = $55,000 + $6,000

Contribute to individual 401(k) = $61,000