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14 April, 05:57

Amber's employer, Lavender, Inc., has a § 401 (k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000, and her marginal tax rate is 24% and she is 42 years old. a. What is the maximum amount Amber can elect for salary deferral treatment for2019?

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  1. 14 April, 08:36
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    For 2019, the maximum amount that any individual can elect for salary deferral treatment on a 401k distribution is the lesser between: 100% of their salary or $19,000.

    in this case, Amber earns much more than $19,000, so the lesser amount would be $19,000.

    If Amber contributes more than $19,000 to her 401k account, then she would have to pay taxes for the extra amount contributed.
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