Qualified Plans

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Which of the following statements is true concerning a 403(b) plan (TSA)?

An arrangement made with certain tax-exempt "501c(3)" organizations and public schools under which employees may set aside amounts of income for retirement purposes

Which of the following is NOT true regarding a non qualified retirement plan?

It needs IRS approval

All of the following are true of the federal tax advantages of a qualified plan, EXCEPT

At distribution, all amounts received by the employee are free of taxes

Which of the following is an example of a non qualified retirement plan?

Executive bonus plan

The advantage of qualified plans to employers is

Tax deductible contributions

All of the following would be different between qualified and non qualified retirement plans EXCEPT

Taxation on accumulation

Which of the following is true of a qualified plan?

It has a tax benefit for both employer and employee

Under the 401(k) bonus or thrift plan, the employer will contribute

An undetermined percentage for each dollar contributed by the employee

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers, for example, is a(n)

403(b) Plan (TSA)

Employer contributions made to a qualified plan

Are subject to vesting requirements

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees

Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPs limit participation to members of closely held corporations

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only

What is the primary purpose of a 401(k) plan?

Retirement

If a retirement plan or annuity is "qualified," this means

It has favorable tax treatment

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits

For a retirement plan to be qualified, it must be designed for the benefit of

Employees

An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after age 70 1/2. The account owner does not have to pay taxes on the growth of his account. What type of retirement account is this?

Roth IRA (Roth IRAs have several distinguishing features. Unlike traditional IRAs, the account owner can continue beyond age 70 1/2, and distributions do not have to begin at age 70 1/2. The contributions are not tax-deductible

Which of the followings statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPs limit participation to members of closely held corporations

How are contributions to a tax-sheltered annuity treated with regards to taxation?

They are not included as income for the employee, but are taxable upon distribution

Under a SIMPLE plan, which of the following is true regarding taxation on both contributions and earnings?

They are tax deferred until withdrawn

If a company has a Simplified Employee Pension plan, what type of plan is it?

A defined contribution plan for a small business


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