Jeannie is employed by a business that operates a qualified profit-sharing plan. a. In 2018, when...
Jeannie is employed by a business that operates a qualified profit-sharing plan.
a. In 2018, when her compensation is $50,000,
what is the maximum contribution the business can make for
her?
$ ?
b. If Jeannie's salary was $250,000, what is
the maximum contribution?
$ ?
Homework Answers
The maximum contribution amount for a profit sharing plan is the lesser of 100% of compensation or $55,000 in 2018.
Additionally, the amount of your compensation that can be taken into consideration when determining employer and employee contributions is limited. The salary limit is $275,000 in 2018.
(a) Maximum contribution the business can make for her is $50,000
100% of Compensation = $50,000 ( $50,000 * 100%)
(or) $55,000 whichever is less.
(b) Maximum contribution the business can make for her is $55,000 if Jeannie's salary is $250,000.
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