chapter 10

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

Church plans

Which of these retirement plans can be started by an employee, even if another plan is in existence

Individual retirement account (IRA)

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

Which of the following is true about qualified retirement that is "top heavy"

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

Who is normally considered to be the owner of a 403 (b) tax-sheltered annuity

Employee

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

Income tax and a 10% penalty assessed upon funds withdrawn from Qualified Plan

A retirement plan that sets aside part of the company's net income for distributions to qualified employee is called a

Profit sharing plan

Post-tax dollar contributions are found in

Roth IRA investments

Premature IRA distributions are assessed a penalty tax of:

10%

In a qualified retirement plan, the yearly contribution to an employees account

Are restricted to maximum set by IRS

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 spouses IRA

How are Roth IRA distributions normally taxed?

distributions are revived tax free

An individual working part-time has an annual income of $ 25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$2,500

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

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 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 sent to this employee

Distribution is subject to federal income tax withholding

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

Make tax-deductible contributions to the plan

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

Mandatory income tax withholding on the transfer account

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld

None

In an individual retirement account (IRA), a rollover contribution are:

Not limited by dollar amount

All of the following statements about traditional individual retirement accounts are false EXCEPT

10% penalty applied to withdraws before 59 1/2

A 55 year old recently received a $30,000 distribution from previous employer's 401k plan, minus $6,000 withholding. Which deferral taxes apply if none of the funds were rolled over

Income taxes plus a 10% penalty tax on 30,000

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

What does a 401(k) plan generally provide its participants?

Salary-deferral contributions