Retirement Plans Ch. 9

An individual participant personally receives eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20% is withheld for income taxes

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?

100

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

59 1/2

What type of employee welfare plans are not subject to ERISA regulations?

Church plans

Which of the following is TRUE about a qualified retirement that is "top heavy"?

More than 60% of plan assets are in key employee accounts

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

Ordinary income tax and a 10% tax penalty for early withdrawal

How are Roth IRA distributions normally taxed?

Distributions are received tax-free

At the age of 45, an individual withdrawals $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in

Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan

Post-tax dollar contributions are found in

Roth IRA investments

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

The account can be rolled into the surviving spouse's IRA

In a qualified retirement plan, the yearly contributions to an employee's account

are restricted to maximum levels set by the IRS

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid

mandatory income tax withholding on the transfer amount

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the

marital deduction

In an individual retirement account (IRA), rollover contributions are

not limited by dollar amount

Traditional individual retirement annuity (IRA) distributions must start by

April 1st of the year following the year the participant attains age 70 1/2

An employer that offers a qualified retirement plan to its employees is eligible to

make tax-deductible contributions to the plan