Question

A Qualified Defined Contribution plan for self-employed individuals is paid by the employer. The maximum contribution is $56,000 or 20% for the employer and 25% for the employee.

1. True
2. False

Answer 1

A qualified defined contribution plan for self-employed individuals is indeed paid by the employer. The maximum contribution is 20% for the employer and 25% for the employee.

Step-by-step explanation:

The statement is true. A qualified defined contribution plan for self-employed individuals is indeed paid by the employer. In this type of plan, both the employer and the employee can contribute to the retirement account. The maximum contribution for the employer is 20% of the employee's compensation, up to a maximum of $56,000. The employee can contribute up to 25% of their compensation.