Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ken is a self-employed architect in a small firm w

Ken is a self-employed architect in a small firm with four employees: himself, his office...

90.2K

Verified Solution

Question

Accounting

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 $30,000 per year and each drafter earns $40,000. Kens net earnings from self-employment (after deducting all expenses and one-half of self-employment taxes) are $310,000. Ken is considering whether to establish a SEP plan and has a few questions:

Is he eligible to establish a SEP plan?

Is he required to cover his employees under the plan? Why or why not?

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

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

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 Kens self-employment tax.

Use 2018 tax laws

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A solution was prepared by dissolving 39.0 g of KCl in 225 g of water. Part A: Calculate...

Chemistry
Q

Relative humidity isn't everything. Why is it that outdoor air of 80 Fo at 55% humidity...

Physics
Q

Write a paper (1,000-1,250 words) that addresses the impact diversity has on health care, and the...

General Management
Q

1 point Find the average value of f x y x y over the rectangle...

Calculus
Q

Is u in the plane in R3 spanned by the columns of A? Why or...

Algebra
Q

For Crane Company, units to be produced are 4,000 in quarter 1 and 5,600 in...

Accounting
Q

In manufacturing its products, Trevano Corp. adds all direct material at the beginning of the...

Accounting
Q

Which of the following is a refundable credit? Child tax credit Lifetime learning credit American...

Accounting
Q

During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000...

Accounting
Q

Which of the following is true about outsourcing? a. It saves both direct and indirect...

Accounting
Q

all information entered is complete, I just need help with the contribution margin analysis ...

Accounting
Q

The Barnett Company has assembled the following data pertaining to certain costs that cannot be...

Accounting