Also known as HR-10 plan or HR 10 plans, it is a tax-deferred pension account for self-employed workers and small businesses for retirement. In general, contributions are tax deductible for up to 25% of yearly income with a limit of $47,000. It has different types of plans: money-purchase (used by high-income earners), defined-benefit (have high annual minimus), and profit sharing (offer annual flexibility based on profits).
Keogh Plan, created through legislation spearheaded by Eugene Keogh, was established in 1962 under Self-Employed Individuals Tax Retirement Act. Later, it was revised in the Employee Retirement Income Security Act of 1974, Economic Recovery Tax Act of 1981, and Tax Equity and Fiscal Responsibility Act of 1982.
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Digesting Financial Statements: Earnings
Retirement Planning: The Significance of Retirement
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