Assignment Task: For each taxpayer, compute the maximum contribution to the retirement plan.
a. Lewis, a self-employed individual, has net earned income of $50,000 in 2021.
If Lewis has no employees, calculate the maximum contribution to a SEP plan that he may deduct from his adjusted gross income. $fill in the blank
b. During 2021, Linda, age 32, has a salary of $40,000. She participates in a Section 401(k) plan and chooses to defer 25 percent of her compensation.
c. What is the maximum amount Linda can contribute to the Section 401(k) plan on a tax-deferred basis? $fill in the blank
d. If Linda's salary was $125,000, instead of $40,000, what is the maximum amount that she could contribute to the Section 401(k) plan on a tax-deferred basis?