New Flashcards
The money that accumulates in the acct
Tax deferred earnings
Quits her job where has balance of ten thousand in qualified plan
If she wants to do direct transfer from her plan to traditional ira how much will be transferred from one plan admin t another and what is tax consequence of direct transfer
Ten thousand tax on growth only
Ten thousand no tax consequence
Eight thousand no tax consequence
Eight thousand tax on growth only
Ten thousand on tax consequence
Traditional ira contributions are tax deductible based on which
Owners income
How long plan in force
Owners age
Ira limit
Owners income
Taxed at 6% per year as long as excess amounts remain in the ira
Excess contributions
Subject to income taxation in the year the wihdrawwal is made
In case of an early distribution prior to age what penalty will also apply
59 1/2
Ten percent penalty will also apply
59 1/2
Totally disabled
Money used to make down pay ment on home not to exceed 100 000 for first time buyers
For post secondary educational expenses
Withdrawals are for a catastrophic expenses or upon death
Conditions under which ten per penalty for early withdrawals wont apply
In direct transfer how is money transferred from one retirement plan to traditional ira
From trustee to trustee
From trustee to ppt
From ppt to new plan
From original plan to original custodian
From trustee to trustee
60 year old ppt in 401k plan takes a distribution and rolls it over to ira within 60 days
There is 10% penalty
Amount distributed is subject to ordinary income tax
Amount of distribution is reduced by amount of 20% withholding tax
No taxes are due since plan ppt is over 59 1/2
Amount of distribution is reduced by amount of a 20% withholding tax
Contribute 100% of income up to an irs specified limit
Excess contribution penalty is 65
Grows tax deferred
Contributions are tax deductible
10% penalty for early non qualified distributions prior to age 59 1/2
Distributions are taxable
Payouts must begin by age 73
Traditional ira
Contribute 100% of income up to an irs specified limit
Excess contribution penalty is 6%
Grows a tax free
Contributions are not tax deductible
Qualified distributions cannot occur until account is open for five years and owner is 59 1/2
Not required minimum age for payouts
Roth IRA
Two ways to accomplish moving of money from one qualified retirement plan to another qualified retirement plan
Rollover and transfer
Operate their practice as a partnership
Want to start program through practice that will provide retirement benefits for themselves and three employees
401k
HR-10 keogh
Section 457 deferred compensation plan
403b plan
HR-10 keogh plan
Specifically for self employed and their employees
Specifically for their self employed and their employees
HR-10 keogh
