What is the maximum amount ken can contribute for himself

Reference no: EM133664167

Problem

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 $33,500 per year and each drafter earns $47,000. Ken's net earnings from self-employment (after deducting all expenses and one-half of self-employment taxes) are $357,000. Ken is considering whether to establish a SIMPLE plan and has a few questions.

Task

A. Is he eligible to establish a SIMPLE plan?

B. Is he required to cover his employees under the plan?

C. If his employees must be covered, what is the maximum amount that can be contributed on their behalf?

D. If the employees are not covered, what is the maximum amount Ken can contribute for himself?

E. 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.

Reference no: EM133664167

Questions Cloud

How many individuals could you produce at the end : If you were to start with a colony of 200 individuals, how many individuals could you produce at the end of one week

By how much would npv increase if the firm depreciated : What is project NPV? By how much would NPV increase if the firm depreciated its investment using the 5-year MACRS schedule?

Prepare a procedure in biological risk assessment process : Prepare ONE page flowchart of the 'Procedure in the Biological Risk Assessment Process'.

What is the action of the temporalis muscle : What is the action of the temporalis muscle. What is the action of the temporalis muscle. depression of the mandible (opens the jaw) elevation of the mandible

What is the maximum amount ken can contribute for himself : Is he required to cover his employees under the plan? If the employees are not covered, what is the maximum amount Ken can contribute for himself?

Explain at least two different types of exhaust systems : Explain at least two different types of exhaust systems, including how they are engineered to direct the flow of gases to optimize thrust generation

Which pollutant comes from fossil fuels combined : Which pollutant comes from fossil fuels combined with solvents that cause respiratory difficulties and eye irritation?

Why is it important to regulate healthcare workforce : Hospitals must have a qualified workforce to provide quality care for their patients. Why is it important to credential and regulate the healthcare workforce?

How did the experiments utilizing immunofluorescence : How did the experiments utilizing immunofluorescence microscopy and electron microscopy aid in developing this model and solidifying the authors' claims?

User Account

All Pages