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32 Cards in this Set
- Front
- Back
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What is ERISA
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sets standards for retirement plans protects pension funds only to private employers |
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Under ERISA, a retirement plan can qualify for what types of tax advantages?
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1. employers deduct contributions 2. Employees are NOT subject to tax on annual earnings 3. No tax is due until distributions |
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A qualified plan means it must meet which 4 ERISA standards?
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1.Non-discrimination rules 2. Vesting 3. Funding requirements 4. Fiduciary responsibilities |
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Contributions to qualified plans are __________ whether they come from employer or employee
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PRE-tax
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Earnings in a qualified plan grow ________
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tax deferred
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If an employee fails to take sufficient distributions from a qualified plan after age 70 1/2, how much will be charged in excise tax?
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50%
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What is a defined benefit plan?
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benefits it will pay employees upon retirement |
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what is a defined contribution plan?
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contributions the employer will make during the employee's working years (very similar to a SIMPLE) |
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Under a non qualified plan, contributions are __________ and are funded with ________ tax dollars
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contributions are not deductible and are funded with after tax dollars
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describe a deferred compensation plan?
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put off bonus, compensation and defer until retirement (good for high earners) |
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what are section 457 plans?
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non qualified, deferred-compensation plan for government employees
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what is a money purchase pension plan
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employer contributes whether or not it had profits PENSION PLAN annual contributions deposits and earnings |
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profit sharing plans are required to contribute every year
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FALSE!
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for a money purchase plan and a profit sharing plan, what are the annual limits?
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$53,000 or 100% of compensation
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what is an important feature of a 401k plan?
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matching contributions
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What is the max limit of a loan on a 401k plan?
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$50,000
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What is the max salary reduction limit to a 401k plan?
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$18,000 ($6,000 catch up once 50) |
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what type of money funds a ROTH 401k?
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after tax contributions
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Can employers make matching contributions to a Roth 401K?
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NO
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what is a 403b plan?
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employer is a non-profit organization no deductions for contributions (no individual contractors) annuities or mutual funds |
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What is a Keogh (HR-10) Plan?
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for self employed individuals must cover ALL full-time employees who are 21 and 12 months employment |
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Who can establish a SEP?
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corporations, partnerships, or sole proprietors |
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A SEP is good for _______ employers because?
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good for small employers because they are less expensive (part time employees can participate)
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the traditional IRA is funded with any _______
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non-deductible contribution
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what is the maximum annual contribution for a Coverdell (ESA)?
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$2,000 per year per child
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At what age does the contributions to a ESA cease?
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at age 18 (funds used by age 30) |
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what options does a person with a Coverdell have if they have not used the funds by age 30?
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1. roll over to another family member under 30 2. distribute funds within 30 days of 30th bday |
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Under a 529 plan, what is the max gift an individual can make without tax consequences?
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$14,000
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For a 529, A special rule permits an election to spread contributions over _______ years, so a taxpayer can make a gift of up to ________ without gift tax consequences.
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over 5 years, gift of up to $70,000
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With a 529, is there an age limit on taking distributions?
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NO
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Can the beneficiary of a 529 be changed?
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yes at any time without tax consequences
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what is the phase-out limit for a Coverdell?
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under $220,000 if married and filing jointly |
