Question 1

Taxpayers never pay tax on the earnings of a traditional 401(k) account.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a true statement regarding saving for retirement?

Accepted Answer

A) In a given year, a taxpayer may participate in either an employer-sponsored defined benefit plan or defined contribution plan but not both. 
B) In a given year, a taxpayer who receives salary as an employee and also receives self-employment income may participate in an employer-sponsored defined contribution plan or may contribute to a self-employed retirement account but not both. 
C) In a given year, a taxpayer may contribute to an IRA (either traditional or Roth) or contribute to a self-employment retirement account but not both. 
D) None of these is a true statement. 
A) In a given year, a taxpayer may participate in either an employer-sponsored defined benefit plan or defined contribution plan but not both. 
B) In a given year, a taxpayer who receives salary as an employee and also receives self-employment income may participate in an employer-sponsored defined contribution plan or may contribute to a self-employed retirement account but not both. 
C) In a given year, a taxpayer may contribute to an IRA (either traditional or Roth) or contribute to a self-employment retirement account but not both. 
D) None of these is a true statement.

Question 3

Lisa, age 45, needed some cash so she withdrew $50,000 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 8 years ago. Through a rollover and annual contributions, she has contributed $80,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty?

Accepted Answer

A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000. 
A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000.

Question 4

Which of the following statements is true regarding employer-provided qualified retirement plans?

Accepted Answer

A) May discriminate against rank and file employees. 
B) Deductible contributions are generally phased-out based on AGI. 
C) Executives are generally ineligible to participate in these plans. 
D) They are generally referred to as defined benefit plans or defined contribution plans. 
A) May discriminate against rank and file employees. 
B) Deductible contributions are generally phased-out based on AGI. 
C) Executives are generally ineligible to participate in these plans. 
D) They are generally referred to as defined benefit plans or defined contribution plans.

Question 5

Which of the following is not a self-employed retirement account?

Accepted Answer

A) SEP IRA 
B) SEM 403(c) 
C) Individual 401(k) 
D) None of these.All of these are self-employed retirement accounts. 
A) SEP IRA 
B) SEM 403(c) 
C) Individual 401(k) 
D) None of these.All of these are self-employed retirement accounts.

Question 6

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Accepted Answer

A) Employers are required to invest salary deferred by employees in investments specified by the employees. 
B) Employers are required to annually fund their deferred compensation obligations to employees. 
C) Employers annually deduct the amount earned by employees under the plan. 
D) Employers may discriminate in terms of who they allow to participate in the plan. 
A) Employers are required to invest salary deferred by employees in investments specified by the employees. 
B) Employers are required to annually fund their deferred compensation obligations to employees. 
C) Employers annually deduct the amount earned by employees under the plan. 
D) Employers may discriminate in terms of who they allow to participate in the plan.

Question 7

Jenny (35 years old) is considering making a one-time contribution to either a traditional 401(k) plan or to a Roth 401(k) plan. She plans to withdraw the account balance when she retires in 40 years. Jenny expects to earn a 7% before-tax rate of return no matter which plan she contributes to. Which of the following statements is true?

Accepted Answer

A) If Jenny's marginal tax rate in the year of contribution is higher than her marginal tax rate in the year of distribution, she will earn a higher after-tax rate of return on the traditional 401(k) plan than on the Roth 401(k) plan. 
B) If Jenny's marginal tax rate in the year of contribution is lower than her marginal tax rate in the year of distribution, she will earn a higher after-tax rate of return on the traditional 401(k) plan than on the Roth 401(k) plan. 
C) Jenny will earn the same after-tax rate of return no matter which plan she contributes to. 
D) Jenny is not allowed to make a one-time contribution to either plan. 
A) If Jenny's marginal tax rate in the year of contribution is higher than her marginal tax rate in the year of distribution, she will earn a higher after-tax rate of return on the traditional 401(k) plan than on the Roth 401(k) plan. 
B) If Jenny's marginal tax rate in the year of contribution is lower than her marginal tax rate in the year of distribution, she will earn a higher after-tax rate of return on the traditional 401(k) plan than on the Roth 401(k) plan. 
C) Jenny will earn the same after-tax rate of return no matter which plan she contributes to. 
D) Jenny is not allowed to make a one-time contribution to either plan.

Question 8

Which of the following statements regarding Roth 401(k) accounts is false?

Accepted Answer

A) Employees can make contributions to a Roth 401(k). 
B) Employers can make contributions to Roth accounts on behalf of their employees. 
C) Contributions to Roth 401(k) plans are not deductible. 
D) Qualified distributions from Roth 401(k) plans are not taxablE.An employer is not allowed to contribute to an employee's Roth 401(k) account. 
A) Employees can make contributions to a Roth 401(k). 
B) Employers can make contributions to Roth accounts on behalf of their employees. 
C) Contributions to Roth 401(k) plans are not deductible. 
D) Qualified distributions from Roth 401(k) plans are not taxablE.An employer is not allowed to contribute to an employee's Roth 401(k) account.

Question 9

Kathy is 48 years of age and self-employed. During the year she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Accepted Answer

A) $11,152. 
B) $17,152. 
C) $29,152. 
D) $53,000. 
A) $11,152. 
B) $17,152. 
C) $29,152. 
D) $53,000.

Question 10

Which of the following statements concerning individual 401(k)s is false?

Accepted Answer

A) In general, individual 401(k)s have higher administrative costs than SEP IRAs. 
B) Employees of the taxpayer cannot participate in individual 401(k)s. 
C) Individual 401(k)s are available only to self-employed taxpayers with 100 or fewer employees. 
D) Individual 401(k)s have contribution limitations. 
A) In general, individual 401(k)s have higher administrative costs than SEP IRAs. 
B) Employees of the taxpayer cannot participate in individual 401(k)s. 
C) Individual 401(k)s are available only to self-employed taxpayers with 100 or fewer employees. 
D) Individual 401(k)s have contribution limitations.

Question 11

Which of the following statements regarding defined contribution plans is false?

Accepted Answer

A) Employers bear investment risk relating to the plan. 
B) Employees immediately vest in their contributions to the plan. 
C) Employers typically match employee contributions to the plan to some extent. 
D) An employer's vesting schedule is used for employers' contributions in determining the amount of the plan benefits the employee is entitled to receive on retirement. 
A) Employers bear investment risk relating to the plan. 
B) Employees immediately vest in their contributions to the plan. 
C) Employers typically match employee contributions to the plan to some extent. 
D) An employer's vesting schedule is used for employers' contributions in determining the amount of the plan benefits the employee is entitled to receive on retirement.

Question 12

Daniela retired at the age of 65. The current balance in her Roth IRA is $200,000. Daniela established the Roth IRA 10 years ago. Through a rollover and annual contributions Daniela has contributed $80,000 to her account. If Daniela receives a $50,000 distribution from the Roth IRA, what amount of the distribution is taxable?

Accepted Answer

A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000. 
A) $0. 
B) $20,000. 
C) $30,000. 
D) $50,000.

Question 13

Qualified distributions from traditional IRAs are nontaxable while qualified distributions from Roth IRAs are fully taxable as ordinary income.

Accepted Answer

A) True 
 B)False

Question 14

Kathy is 60 years of age and self-employed. During the year she reported $400,000 of revenues and $100,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Accepted Answer

A) $53,000. 
B) $59,000. 
C) $75,727. 
D) $57,727. 
A) $53,000. 
B) $59,000. 
C) $75,727. 
D) $57,727.

Question 15

Which of the following statements regarding IRAs is false?

Accepted Answer

A) Taxpayers who participate in an employer-sponsored retirement plan may be allowed to make deductible contributions to a traditional IRA. 
B) The ability to make deductible contributions to a traditional IRA and nondeductible contributions to a Roth IRA may be subject to phase-out based on AGI. 
C) A taxpayer may contribute to a traditional IRA in 2017 but deduct the contribution on her 2016 tax return. 
D) Taxpayers who have made nondeductible contributions to a traditional IRA are taxed on the full proceeds when they receive distributions from the IRA. 
A) Taxpayers who participate in an employer-sponsored retirement plan may be allowed to make deductible contributions to a traditional IRA. 
B) The ability to make deductible contributions to a traditional IRA and nondeductible contributions to a Roth IRA may be subject to phase-out based on AGI. 
C) A taxpayer may contribute to a traditional IRA in 2017 but deduct the contribution on her 2016 tax return. 
D) Taxpayers who have made nondeductible contributions to a traditional IRA are taxed on the full proceeds when they receive distributions from the IRA.

Taxpayers never pay tax on the earnings of a traditional 401(k) account.

Which of the following is a true statement regarding saving for retirement?

Which of the following statements is true regarding employer-provided qualified retirement plans?

Which of the following is not a self-employed retirement account?

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Which of the following statements regarding Roth 401(k) accounts is false?

Kathy is 48 years of age and self-employed. During the year she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Which of the following statements concerning individual 401(k)s is false?

Which of the following statements regarding defined contribution plans is false?

Qualified distributions from traditional IRAs are nontaxable while qualified distributions from Roth IRAs are fully taxable as ordinary income.

Kathy is 60 years of age and self-employed. During the year she reported $400,000 of revenues and $100,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Which of the following statements regarding IRAs is false?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 13: Retirement Savings and Deferred Compensation

Taxpayers never pay tax on the earnings of a traditional 401(k) account.

Which of the following is a true statement regarding saving for retirement?

Which of the following statements is true regarding employer-provided qualified retirement plans?

Which of the following is not a self-employed retirement account?

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Which of the following statements regarding Roth 401(k) accounts is false?

Kathy is 48 years of age and self-employed. During the year she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Which of the following statements concerning individual 401(k)s is false?

Which of the following statements regarding defined contribution plans is false?

Qualified distributions from traditional IRAs are nontaxable while qualified distributions from Roth IRAs are fully taxable as ordinary income.

Kathy is 60 years of age and self-employed. During the year she reported $400,000 of revenues and $100,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to an individual 401(k)?

Which of the following statements regarding IRAs is false?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters