Harvey is a self-employed accountant with earned income from the business of $120,000 (after the deduction for one-half of his self-employment tax). He uses a defined contribution Keogh plan. What is the maximum amount Harvey can contribute to his retirement plan in 202

$24,000

Explanation:

It is mentioned in the question that, Harley who is a self employed accountant has an income from his business of 1,20,000 dollar, which is after the one half deduction of his self employment tax.

He uses a Keogh contribution plan.

Now, due to reducing of the earned income that is base by a one-half of his self-employment tax and by the contribution itself, the permissible 25% contribution is reduced to an effective of 20% contribution rate.

So, 20% of $120,000 or $53,000 whichever is LESS

20% of $120,000 = $24,000

Hence, the maximum amount Harvey contributes to his retirement plan is $24,000.

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%

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