Lesson3: 10 Retirement plans
Permanent IRA distributions are assessed a penalty tax of
10%
All of the following statements about traditional individual retirement accounts are false except
10% penalty is applied to withdrawals before age 59 1/2
What is the maximum number of employees earning at least 5000 add an employer can have in order to start a simple retirement plan
100
An individual participant personally received eligible Rollover funds from a profit sharing plan what is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
An individual working part time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA distribution allowable?
2500
What is the excuse tax rate The IRS Imposes on individuals age 701/2 or older who do not take the required minimum distribution's from there qualified retirement plan?
50%
And IRA owner can start making with drawls and not be subject to tax penalties beginning at what age?
59 1/2
How long does an individual have to rollover funds from an IRA or Qualified plan?
60 days
Traditional individual retirement annuity IRA distributes must start
70 1/2
A qualified pre-sharing plan is designed to
Allow employees to participate in the profits of the company
In a qualified retirement plan the yearly contribution To an employee's account
Are restricted to maximum levels set by the IRS
What type of employee welfare plans are not subject to ER I SA regulations
Church plans
And employee requested that the balance of her 401(k) account be sent directly to her in one lump sum upon receipt of the distribution she immediately has the funds rolled over into an IRA what is the tax consequence of the distribution set to this employee?
Distribution is subject to federal income tax withholding
How are Roth IRA distributions normally taxed?
Distributions are received tax-free
Tom has a qualified retirement plan with his employer that is currently considered to be 80% vested how can this be interpreted
If Tom's employment is terminated, 20% of the funds would be forfeited
At age 45 and individual with drawls $50,000 from his qualified profit sharing plan and then deposit 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Income tax and a 10% penalty assessed upon funds withdrawn from the qualified plan
If 55-year-old receive a $30,000 distribution from a previous employer's 401(k) plan -6000 withholding. Which federal tax appply If none of the fines were rolled over?
Income tax plus a 10% penalty tax on 30,000
Which of these retirement plans can be started by an employee even if another plant is in existence?
Individual retirement account IRA
Which plan is intended to be used by a sole proprietor And the employee of the business?
Keogh plan
And employer that offers a qualified retirement plan to its employees is eligible to
Make tax-Deductible contributions to the plan
Rick recently died and left behind an individual IRA account in his name his widow was forwarded the balance of the IRA the riddle qualifies for the
Marital deduction
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 subject to a distribution received prior to the age 59 1/2?
Ordinary income tax and a 10% tax penalty for early withdrawal
A retirement plan that sets a side part of the company's net income for distributions to qualified employees is called a
Profit sharing plan
Post tax dollar contributes our Found in
Roth IRA Investments
What does a 401(k) plan generally provide its participants
Salary-deferral contributions
Which of the following is true if the owner of an IRA names their spouse the beneficiary but then dies before any Distributions are made?
The account can be rolled over into a surviving spouse is IRA
Who is Normally considered to be the owner of a 403B tax sheltered annuity?
The employee
Which product would best serve a retired individual looking To invest a lump sum of money through an insurance company?
annuity
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
When funds are shifted straight from one IRA to another IRA, what percentage of tax is withheld
none
In an individual retirement account (IRA), rollover contributions are
not limited by dollar amount