McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 51

{Planning} Rita is a self-employed taxpayer who turns 39 years old at the end of the year (2011).During 2011, her net Schedule C income was $300,000.This was her only source of income.This year, Rita is considering setting up a retirement plan.What is the maximum amount Rita may contribute to the self-employed plan in each of the following situations?
a.She sets up a SEP IRA.b.She sets up an individual 401(k).