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Rita is a self-employed taxpayer who turns 39 years old at the end of the year (2021). In 2021, her net Schedule C income was $296,000. This was her only source of income. This year, Rita is considering setting up a retirement plan. What is the maximum amount Rita may contribute to the self-employed plan in each of the following situations

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michell96

The maximum contribution that Rita can make to SEP-IRA is $55,000

A SEP IRA is a term to refer to an individual retirement plan used in the United States. This plan establishes a maximum limit each year, in the case of 2018 it had a maximum contribution limit of 25% of the annual net salary of $ 55,000.

Based on the above, Rita could make a maximum contribution to the SEP-IRA of $ 55,000 since 25% of her salary ($ 296,000) is $ 74,000.

Note: This question is incomplete because there is some information missing. Here is the complete information.

A. Set up a SEP IRA account. Maximum contribution _______________?

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