Reference no: EM131217739
Richard, age 40, is the owner of Auto Repair, Inc. In addition to Richard, the company has five employees. Richard wants to establish a retirement plan for his employees. He is considering two plans: (1) a Section 401(k) plan and (2) a SEP-IR
A. Assume you are a financial planner and Richard asks for your advice. Answer the following questions.
a. Explain to Richard the advantages and disadvantages of each plan
b. Assume that Auto Repair establishes a 401(k) plan. Employees can elect a salary deferral of up to 6 percent of compensation but not to exceed $17,000 (2012 limit for participants under age 50 .The Company makes a matching contribution of 50 cents for each dollar contributed. James, age 25, is a mechanic who has decided to defer only 3 percent of his wages because of substantial personal expenses. What advice would you give to James?
c. Susan, age 28, is the company's office manager and earns $35,000. She has worked for the company for three years. Can Richard exclude her from participating in the 401(k) plan to hold down retirement contributions?
d. assume that the company instead establishes a SEP-IRA. Michael, age 28, is an eligible employee who earned $50,000 in 2009. What is the maximum annual tax-deductible amount the company can contribute to the SEP-IRA on Michael behalf?
e. Richards wife Maria age 35 is self-employed as freelancer writer after deducting eligible expenses and one-behalf of the social security self-employment tax she has a net income of $ 50,000 of the current tax year. What is the maximum tax deductible contribution Maria can make to defined-contribution Keogh plan?
Write response about mona lisa - every picture tells a story
: View the video, "The Mona Lisa - Every Picture Tells a Story", produced by the BBC Chanel 5, whose narrative tone is critical of Leonardo's contributions. Then submit a minimum 150 word response that addresses the main ideas and themes.
|
Identify and discuss any risks associated with the events
: Pizza Napoli is a very successful restaurant that delivers pizza, salads, and hot sandwiches to customers in a medium-sized city that has a large public university. Pizza Napoli has four locations, one on each side of town (north, south, east, and we..
|
Frisco hardware is trying to do some financial planning
: Frisco Hardware is trying to do some financial planning. The company knows it will need to have $257250 in 13 years to pay off a loan. The company will be receiving $99431 at the end of year 8 from a licensing deal with another manufacturer, but the ..
|
Write response of the given video
: Art History Response. View the video, "Raphael's Revolution". Then submit a minimum 150 word response that addresses the main ideas and themes.
|
Behalf of the social security self-employment tax
: Richard, age 40, is the owner of Auto Repair, Inc. In addition to Richard, the company has five employees. Richard wants to establish a retirement plan for his employees. Richards wife Maria age 35 is self-employed as freelancer writer after deductin..
|
Develop a plan of action for encouraging ethical behavior
: Select a small business with which you are familiar and discuss the most likely forms of business law it would need to be concerned about. Provide specific examples to support your response.
|
What criminal justice positions exist in the marketplace
: What criminal justice positions exist in the marketplace where one can be successful without having quality writing skills? If any, identify those positions and explain why a professional in that position doesn't need to be a quality writer. If yo..
|
What is arbitrage and explain the arbitrage opportunity
: What is arbitrage? Explain the arbitrage opportunity when the price of a dually listed mining company stock is $50 (USA) on the New York Stock Exchange and $52 (CAD) on the Toronto Stock Exchange. Assume that the exchange rate is suck that $1 (USA) e..
|
What is basis in the warehouse and in the land
: Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $201,000. The appraised fair market value of the warehouse was $112,250, and the appraised value of the land was $141,750. What is Bob’..
|