Qualified Plans Flashcards
Examples of qualified plans
IRA, 401k, KEOGH/HR-10, SEP, SIMPLE
What is required to qualify an individual to contribute to a traditional Ira?
Earned income
What are the income tax benefits of a qualified plan?
Employer contributions are tax deductible and are not taxed as income to the employee. Earnings accumulate tax deferred
Simple plans are available for groups of how many employees?
No more than 100
Primary purpose of a 401k
Provide retirement income
What type of plan is a 401k?
Qualified profit sharing plan
In what form of payment must the contributions to a traditional IRA be made?
Cash
For a retirement plan to be qualified it must be designed to benefit who?
Employees
A defined benefit qualified plan is structured based on what
A pre determined benefit amount
Is a defined contribution plan a qualified plan?
Yes
When do you have to start taking distributions for most qualified retirement plans
No later than April 1 of the year after you turn 70.5
Coverage requirement for a qualified plan requires
A broad range of employees to be covered. The trustees must manage the plan for the benefit of the participants
Deferred compensation
Employee forgoes current pay in exchange for future benefits
Does the irs limit the amount contributed to a qualified plan?
Yes
Is there a maximum dollar amount for a rollover of one qualified plan to another?
No
All or part of a distribution from a qualified plan may be rolled over into an Ira with or without tax
Without tax
KEOUGH plans are available to self employed sole proprietors, partners, and employees but not to
Corporate officers
Profit sharing plan
A Corp sets up a qualified plan to contribute a portion of their net income for the benefit of employees
Contributions to a SIMPLE plan by participants must be vested when
Immediately
When surrendering a 403b for cash under age 59.5
All the proceeds are taxable as ordinary income plus the proceeds are subject to 10% penalty
