During 2018, Jill, age 39, participated in a Section 401 (k) plan which provides for maximum employee contributions of 12%. Jill's salary was $90,000 for the year. Jill elects to make the maximum contribution. What is Jill's maximum tax-deferred contribution to the plan for the year

The correct answer is $10,800.

Explanation:

According to the scenario, the given data are as follows:

Jill's salary = $90,000

Jill's maximum contribution = 12%

So, we can calculate Jill's maximum tax-deferred contribution by using following formula:

Maximum tax-deferred contribution = Jill's salary * Maximum contribution percentage.

= $90,000 * 12%

= $90,000 * 0.12

= $10,800

Hence, Jill's maximum tax-deferred contribution to the plan for the year is $10,800.