Retirement quiz Flashcards
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
Ordinary, income tax, and a 10% tax penalty for early withdrawal
A 55-year-old recently received a $30,000 distribution from a previous employer’s 401K plan, minus $6000 withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes, plus a 10% penalty tax on $30,000
All of the following statements about traditional individual retirement accounts are false except
10% penalty is applied to withdrawals before age 59 1/2
An employee requested that the balance of her 401(k) account be sent directly to her and one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to federal income tax withholding
How long does an individual have to roll over funds from an IRA or qualified plan?
60 days
Which of these retirement plans can be started by an employee, even if another plan is in existence?
Individual Retirement Account (IRA)
A sole proprietor may use this plan only if the employees of this business are included
Keogh Pension Plan
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$6000
At the age of 45, an individual withdrawals $50,000 from his qualified profit sharing plan and then deposit this amount into a personal savings account. This action would result in:
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan
Tom has a qualified retirement plan that his employer that is currently considered to be 80% vested. How can this be interpreted?
If Tom’s employment is terminated, 20% of the funds would be forfeited
