Qualified plans Flashcards
If a retirement plan is qualified what does that mean?
The plan has favorable tax treatment
What are some examples of qualified plans?
IRA, 401K, HR-10 (Keogh) SEP,SIMPLE
An employer sponsoring a qualify retirement plan for an employee where the employers contributes money whenever the business has profits what is this type of plan called?
Profit sharing plan
What is required to qualify an individual to contribute to a traditional IRA?
Earned income
What type of plan is a 401(k)?
Qualify profit-sharing plan
What is the penalty for excessive contribution to a traditional IRA?
6%
What are the consequences of withdraw funds from a traditional IRA prior to the age of 59 1/2
10% penalty
Who qualifies for tax shelter annuity or 403B plans
Employees of nonprofit organizations under section 5 or 1C3 and employees of public school systems
In what form of payment must the contribution to a traditional IRA be made?
Cash
What qualify plan is suitable for self-employed?
HR-10 or Keogh
What are the income tax benefits of a qualified plan?
Employer contributions are taxed deductible and are not tax as income to the employee earning accumulates tax deferred
For a retirement plan typically qualify it must be designed for whose benefit?
Employee
and qualify plans are employers contributions taxed as income to the employee?
No employers contributions are not taxed as incomes to the employee
what is the primary purpose of a 401(k) plan?
Provide retirement income
SIMPLE plans are available to groups of how many employees?
No more than 100
What qualifies plan in suitable for the self-employed?
HR-10 or KEOGH
What type of plan is a 401(k)?
Qualify profit-sharing plan
For retirement plan to be qualified, it must be designed for whose benefit?
Employees
Shuffle plans are available to groups of how many employees?
No more than 100
what is the penalty for excessive contributions to traditional IRAs?
6%
What are some examples of qualified plans?
IRA 401(k) HR – 10 SEP’s simple
What are the income tax benefits of a qualified plan?
Employers contributions are tax deductible and are not taxed as income to the employee the earnings accumulated tax deferred
What is the primary purpose of a 401(k) plan?
Provide retirement in income
