During 2018, Jill, age 39, participated in a Section 401(k) plan which provides for maximum employee contributions of 12%. Jill'

Question

3 years ago

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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

Business

1 answer:

maks197457 [2] · Answer 1 · 2022-03-24T17:04:41+03:00

Answer:

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.