Qualified Plans
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee
If a retirement plan or annuity is "qualified", this means
It is approved by the IRS
Rollover
Withdrawing the money from a qualified plan and placing it into another qualified plan.
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits
Gross Income
the total amount of income from wages before any payroll deductions
Which of the following is NOT true regarding non qualified retirement plan?
It needs IRS approval
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
Taxation
Benefits in qualified plans are taxable to the plan participant when they are
An IRA purchased by a small employer to cover employees is known as a
Simplified employee pension plan
An Internal Revenue Code provision hat specifically provides for an indv retirement plan for public school teachers is a(n)
403(b)
2 attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh Plan)
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only
Pretax contribution
contribution made before federal and/or state taxes are deducted from earnings
Earned Income
salary, wages, or commissions; but not income from investments, unemployment benefits, and similar sources of income
Which of the following scenarios will incur a 10% tax penalty on distributions
Distributions are made on a policy before age 59 1/2
Self-Employed Plan
Plan allows for self-employed individuals to fund their retirement programs with pre-tax dollars as if under a corporate retirement or pension plan
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money wherever a profit is realized. What is this called?
Profit sharing plan
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees
Which type of retirement account does not require the owner to start taking distributions at age 72?
Roth IRA
Employer contributions made to a qualified plan
Are subject to vesting requirements
Indv Qualified Plans - IRA & Roth IRA
Anybody with earned income can contribute to either plan
Simplified Employee Plans
Type of qualified plan suited for small employer or for the self employed to establish & maintain an indv retirement account
SIMPLE plans require all of the following EXCEPT
At least 1,000 employees.
Which of the following applicants would NOT qualify for a Keogh Plan?
Someone who works 400 hours per year
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation of accumulation
A 403(b) plan, commonly referred to as a TSA, is available to be used by
Teachers & non-profit organizations
SIMPLE Plans
Savings incentive match plans for employees of small employers, a type of qualified retirement plan.
a 35 yo spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. What penalties, if any, will she have to pay?
No penalties
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation
nonprofit organization
Institution that functions much like a business, but does not operate for the purpose of generating profits
Vesting
The right of a participant in a retirement plan to retain part or all of the benefits
If a co has a Simplified Employee Pension plan, what type of plan is it?
A qualified plan for small business
Profit Sharing and 401k plans
A 401(k) Plan is a defined contribution plan for employees of for-profit companies. It is an elective deferral plan or salary reduction. 401(k) Plans also can be profit-sharing plans allowing an employee a choice between taking income in cash or putting the income into a qualified plan and deferring that portion of income.
If a co has a simplified employee pension plan, what type of plan is it?
A qualified plan for small business
Traditional IRA
Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.
What is the primary use of a 401(k) plan?
Retirement
All of the following may use a 403(b) plan for their retirement EXCEPT
The CEO of a private corporation
Roth IRA
A personal savings plan; contributions are not tax-deductible; earnings are tax-free
Under the 401(k) bonus or thrift plan, the employer will contribute
An undetermined % for each dollar contributed by the employee
Which of the following statements concerning a simplified employee pension plan (SEP) is INCORRECT?
SEP's are suitable for large companies
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
They are tax deferred until withdrawn