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19 February, 20:20

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

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  1. 19 February, 20:34
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    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.
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Home » Business » 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.
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