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 56

[LO 5] {Planning} Reggie is a self-employed taxpayer who turns 59 years old at the end of the year (2011).In 2011 year, his net Schedule C income was $300,000.This was his only source of income.This year, Reggie is considering setting up a retirement plan.What is the maximum amount he may contribute to the self-employed plan in each of the following situations?
a.He sets up a SEP IRA.b.He sets up an individual 401(k).