Simplified Employee Pensions (LO 5.4) During 2018, Jerry is a self-employed therapist, and his net earned income is $167,000 from his practice. Jerry's SEP Plan, a defined contribution plan, states that he will contribute the maximum amount allowable. Calculate Jerry's contribution.$

Simplified Employee Pensions (LO 5.4) During 2018, Jerry is a self-employed therapist, and his net earned income is $167,000 from his practice. Jerry's SEP Plan, a defined contribution plan, states that he will contribute the maximum amount allowable. Calculate Jerry's contribution.$

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 41P

See similar textbooks

Related questions

Q: Charles, a single 29-year-old, deferred 2% of his salary, or $2,000, into a 401(k)-plan sponsored by…

A: The primary factor for determine the contribution limit are filing status .

Q: Karen, 28 years old and a single taxpayer, has a salary of $35,000 and rental income of $33,000 for…

A: Solution Rental income refer the income received from rent from the building or house is taxed…

Q: Ursula, an employee of Ficus Corporation, is 35 years old and plans to retire in 20 years. The…

Q: 11. Jean and Dan both work. Each earns a salary of $48,500, but only Jean is a member of a…

A: Introduction: A Registered Retirement Savings Plan (RRSP) is a Canadian federal…

Q: What is the maximum amount Amber can elect for salary deferral treatment for 2020? If Amber elects…

A: Section 401(k) plan: In § 401(k) plan, employees are allowed to cover compensation up to $19,000…

Q: Required [The following information applies to the questions displayed below.] William is a single…

A: Given information, AGI before IRA contibution deduction $67,000

Q: For calendar year 2020, Jean was a self-employed consultant with no employees. She had $80,000 of…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Joshua Company has a define contribution plan that covers its existing employees. The terms of the…

A: A Defined Contribution Plan is a retirement plan in which employees allocate part of their salary…

Q: employment income

A: Correct Answer is :- D. $42,500

Q: Sal, single and age 72, is a participant of his employer’s qualified profit-sharing plan. For the…

A: IRA is an Individual retirement account. Individual can make contribution to this account, to have…

Q: Which of the following statements is correct? a. The contribution limits for SEPs are a maximum…

A: The given question is answered as per the IRS Rules for year 2020.

Q: Eric, your friend, received his Form W-2 from his employer (below) and has asked for your help.…

A: At the conclusion of the year, employers must deliver Form W-2, frequently referred to as the Wage…

Q: Myers, who is single, has compensation income of $72,000 in 2020. He is an active participant in his…

A: Introduction: IRA: IRA stands for Individual Retirement Account in which money can be saved for the…

Q: What is included on line 1 of 1040 in the following problem? Matthew’s annual salary from The Pour…

A: Line 1 item of Form 1040 includes all the income earned by an individual which is reported on the…

Q: Gene and Dixie, husband and wife (ages 35 and 32), bc gross income of $95,000 in 2017, and they are…

A: IRA contribution limitations and eligibility are determined by your modified adjusted gross income,…

Q: In 2020, Juergen made after-tax contributions of $24,300 to his employer's qualified plan. In August…

A: Certain commodities and financial securities that are exempt from taxes are referred to as tax-free.…

Q: Individual Retirement Accounts (LO 5.3) Donna, age 42 and a single taxpayer, has a salary of…

A: It is a saving plan introduced by US government for increasing saving, savings are increased in this…

Q: A 42-year-old single taxpayer earning a salary of $138,000 a year can make which of the following…

A: Tax or Taxes: Tax is an amount paid by the persons (individuals and business entities) to a…

Q: Harvinder's employer provides her with a defined benefit pension plan that earns her a flat pension…

A: Pension Adjustment: It is the plan for pension adjustment of individual's total pension credits for…

Q: .Perquisite is monetary or non-monetary payments made to an employee, discuss the provisions of…

A: Particulars Rs. Rs. Basic salary 150000 Dearness allowance(50000*40%)…

Q: Darlene, age 35, and Devin, age 36, are martied. Darlene earns $48,000, and Devin earns $41,000.…

A: Correct option is C i.e contribution $12,000 & deduction $6000

Q: Alicia has been working for JMM Corporated for 32 years. Alicia participates in JMM's defined…

A: Average total compensation- Average Total Compensation means the average of the Executive's yearly…

Q: During 2018, Jerry is a self-employed therapist, and his net earned income is $160,000 from his…

A: SEP IRA- A Simplified Employee Pension is a retirement plan that provides benefit to employees after…

Q: In 2021, Dan Davis, age 85 and single, received Social Security benefits of $14,000, dividend and…

A: Introduction: The Internal Revenue Service (IRS) utilizes your adjusted gross income (AGI). To…

Q: the amortization fraction for each year the amortization of the prior service co

A: Amortization is a calculation of an expense deducted to arrive at net income on your financial…

Q: Silverado maintains a fully funded pension plan. During2011, $1 million was paid to retired workers,…

A: Pension fund: It can be defined as an investment pool that is used to pay for the worker’s…

Q: Allie started her new job in 2020. She received the following payments or benefits paid on her…

A: Allie started her new job in 2020. Payments or benefits paid by her employer are 1. Salary = $84000…

Q: A 42-year-old single taxpayer earning a salary of $138,000 a year can make which of the following…

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: Don Driller, who is 56 years old, is provided with $120,000 of group-term life insurance by his…

A: According to the IRS publication: "IRC section 79 provides an exclusion for the first $50,000 of…

Q: On August 10, 2018, Don turned 65 and received his first pension payment. Over the year, he had…

A: Pension plan Pension plan is an agreement between the employer and employee. After the retirement of…

Q: [The following information applies to the questions displayed below.] William is a single writer…

A: 2021 IRA Contribution Limits: $6000 if age is less than 50 $7000 if age is 50 or more than 50

Q: Amber’s employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its…

A: Section 401(k) plan: In Section 401(k) plan, employees are allowed to cover compensation up to…

Q: What is the maximum amount that Terry and Jennifer may each deduct for contributions to their…

A: Pension plan: Pension plan can be defined as the plan where both employer and employee contribute…

Q: A corporation's pension plan provides a lifetime annual income to its employees upon retirement at…

A: Given information: Salary upon retirement is $50,732 Number of years of service is 26 years Rate of…

Q: Jean and Dan both work. Each earns a salary of $51,000, but only Jean is a member of a registered…

A: Given That: Jean and Dan Salary=$51000 Jean's Contribution to pension= 2% Dean's unused…

Q: [The following information applies to the questions displayed below.) Matthew (48 at year-end)…

A: The employee retirement plan provides financial safety for the employee after retirement. The…

Q: 21. In 2021, Dan Davis, age 85 and single, received Social Security benefits of $14,000, dividend…

A: The social security tax is the tax that is collected by the government for the benefits given to the…

Q: . Assume he does participate in an employer-sponsored plan, and his AGI before the IRA contribution…

A: If the Taxpayer's age upto 50 years, then maximum contribution limit is $6,000. However, if Tax…

Q: Alicia has been working for JMM Corp. for 32 years. Alicia participates in JMM's defined benefit…

A: Calculation of Alicia's average salary of three highest years of Compensation : = (570000 +…

Q: For the previous year ending March 31,2021, A has submitted following details: Basic salary:…

A: Income tax is the tax payable on the income earned during the previous financial year for the…

Q: Wayne, age 53, and Janet, age 51, are married and file a joint return. Wayne is covered by an…

A: Answer :-The amount refer to the deductible contribution that should be made for Janet to her…

Q: William is a single writer (age 35) who recently decided that he needs to save more for retirement.…

A: IRA's are individual retirement accounts in which an individual can contribute to the retirement…

Q: 3. For the 2020 tax year, Nancy, a single taxpayer, receives $12,000 in Social Security benefits.…

A: For the 2020 Tax Year percentage of Social Security Benefit is Taxable if Income is Less than 25000…

Q: On December 31, 2020, Stormy & Co. started a defined benefit plan for its president. The plan…

A: In the given question, Stormy & Co. started a defined benefit plan for its president. The plan…

Q: Marcus Gravey, an Executive Manager at Bank oF America receives a salary of $6,500,000.00 per annum…

A: Statutory income Salary. $6500000 less: 10% contribution…

Q: What is the maximum deductible contribution into a Traditional IRA in 2021?

A: Tax refers to the amount charged by the government on individuals, partnership firms, HUF’s or any…

Q: Shyam is a participant in a SIMPLE § 401(k) plan. He elects to contribute 4% of his $40,000…

A: ANSWER Deferred compensation is defined as a process in which a part of a worker's income is…

Q: (a) For the previous year ending March 31,2021, A has submitted following details: Basic salary:…

A: Computation of income from salary of A for Previous year 2020-21 relating to assessment year 2021-22…

Concept explainers

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.

Question

Simplified Employee Pensions (LO 5.4)

During 2018, Jerry is a self-employed therapist, and his net earned income is $167,000 from his practice. Jerry's SEP Plan, a defined contribution plan, states that he will contribute the maximum amount allowable.

Calculate Jerry's contribution.
$

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

During 2021, Jerry is a self employed therapist, and his net earned income is $160000 from his practice. Jerry's SEP plan, a defined contribution plan, states that he will contribute the maximum amount allowable. The maximum amount allowable Of Jerry's contribution is 32,000 160,000 x 20% = $32,000
During 2023, Pencho is a self-employed therapist, and his net earned income is $170,000 from his practice. Pencho's SEP-IRA Plan, a defined contribution plan, states that he will contribute the maximum amount allowable. Calculate Pencho's contribution.
Please determine the maximum 2022 401k contribution and IRA deduction for the following MFJ taxpayers with AGI of $208,000. Tanya is 52 and participates in her employer's 401k. Tanya's husband Benny is 48 years old, currently unemployed and plans to make the maximum deductible contribution to his own IRA plan. Prepare your calculations in Excel and show all work.
Steve Grayson, is self-employed age 43. He has established a SEP-IRA for himself several years ago. In 2019, Steve had a $1,000 excess contribution to his SEP-IRA. In 2020. his net earnings from the business are $80,000. He uses the maximum contribution rate for his SEP-IRA account. What amount would Steve's contribution be for 2020. a.) $14,870 b.) $0 c.) $13,870 d.) $57,000
What is included on line 1 of 1040 in the following problem? Matthew’s annual salary from The Pour House is $98,000. Matthew’s 2018 bonus was $6,000 (received in 2019). Matthew prticipates in his employer’s group health insurance plan to which he contributed $7,200 in 2019 for medical coverage. These contributions are made with after-tax dollars. The Pour House does not provide any retirement benefits, but it has established a § 401(k) plan to enable its employees to save for retirement. Matthew contributed $19,000 to the plan in 2019. Courtney is a licensed architect who works part time as an architectural consultant. Her professional activity code is 541310. Courtney collected $72,000 in consulting fees during 2019.
Required information [The following information applies to the questions displayed below.] In 2023, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations. Note: Leave no answers blank. Enter zero if applicable. a. Susan's salary and the couple's AGI before any IRA contribution deductions is $224,000. The couple files a joint tax return. Answer is complete but not entirely correct. Maximum deductible IRA contribution $ Susan 0 $ Dan 2,400
Required information [The following information applies to the questions displayed below.] William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2021 AGI before the IRA contribution deduction is $67,000 (all earned income). (Leave no answer blank. Enter zero if applicable.) c. Assume he does participate in an employer-sponsored plan, and his AGI before the IRA contribution deduction is $77,000. What is the maximum deductible IRA contribution William can make in 2021? Maximum deductible IRA contribution
For the following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2023. Traditional IRA Contribution a. Juan, age 41, earns a salary of $58,000 and is not an active participant in any other qualified plan. His wife, Agnes, generates no earned income. 6,000 X
For the following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2023. Traditional IRA Contribution 6,000 X a. Juan, age 41, earns a salary of $58,000 and is not an active participant in any other qualified plan. His wife, Agnes, generates no earned income. b. Abby, age 29, reports earned income of $45,000, and her husband, Sam, reports earned income of $4,600. They are not active participants in any other qualified plan. c. Leo's employer makes a contribution of $3,500 to Leo's simplified employee pension plan. Leo is single, he reports earned income of $70,000, and his AGI is $55,000. 10,600 x 6,000 X
Required information [The following information applies to the questions displayed below.] In 2023, Susan (44 years old) is a highly successful architect and is covered by an employee-sponsored plan. Her husband, Dan (47 years old), however, is a Ph.D. student and unemployed. Compute the maximum deductible IRA contribution for each spouse in the following alternative situations. Note: Leave no answers blank. Enter zero if applicable. d. Susan's salary and her AGI before the IRA contribution deduction is $85,000. Dan reports $5,000 of AGI before the IRA contribution deduction (earned income). The couple files separate tax returns. Maximum deductible IRA contribution Susan Dan
[The following information applies to the questions displayed below.] William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2021 AGI before the IRA contribution deduction is $67,000 (all earned income). (Leave no answer blank. Enter zero if applicable.) c. Assume he does participate in an employer-sponsored plan, and his AGI before the IRA contribution deduction is $77,000. What is the maximum deductible IRA contribution William can make in 2021? Maximum deductible IRA contribution
Pension Benefits. (Obj. 2) On August 10, 2018, Don turned 65 and received his first pension payment. Over the years, he had contributed $68,900 to his employer’s qualified retirement plan. Taxes were paid on $24,700 of this amount. The remaining $44,200 was contributed after the law was changed to permit pre-tax contributions to the plan. Don is to receive monthly benefits of $425 on the same day every month for the remainder of his life. From the 5 monthly payments, Don receives in 2018, what amount is included in gross income? If Don receives 12 payments in 2019, what amount does he include in gross income? If Don lives longer than his expected 260 payments, how much of each month’s $425 payment will be included in his gross income? How would your answer to Parts a. - c. change if Don were married and his pension benefits were to continue for both his and his wife’s lives? Don’s wife is 61 as on August 10, 2018.