Ocatagon Industries has an age-weighted profit sharing plan that uses a fixed age-weighted formula for allocating...
Ocatagon Industries has an age-weighted profit sharing plan that uses a fixed age-weighted formula for allocating employer contributions. The plan covers 50 employees. The owner and two key employees are highly compensated, each earning $500,000 per year. Average pay for the rank-and-file employees is $35,000 per year. This year, the company allocated $1,000 to each employee’s retirement account. The tax implications of such an allocation include which of the following?
A. because the plan is top-heavy, Ocatagon cannot receive a tax deduction until an employee withdraws funds from his or her retirement account
B. participant does not pay income tax on employer contributions and earnings until the plan participant withdraws the funds
C. plan distributions for hardship withdrawals made to employees before age 59 1/2 are tax free
D. a and c
Homework Answers
B. participant does not pay income tax on employer contributions and earnings until the plan participant withdraws the funds
Add Answer to:
Ocatagon Industries has an age-weighted profit sharing plan that
uses a fixed age-weighted formula for allocating...
peter molloy is considering making a contribution to an IRA, but his employer has a profit-sharing...
peter molloy is considering making a contribution to an IRA, but his employer has a profit-sharing plan. Plan benefits vest over 6 years, and peter is 60% vested. The employer made no contribution to the plan for the year. No employees have terminated during the year. Which of the following statements concerning Peter’s contribution to an IRA is correct? peters contribution will not be deductible because contributions are not required every year to profit-sharing plan. Peters contribution will be deductible...
What is the definition of a defined benefit plan? a. formal retirement plan that provides the...
What is the definition of a defined benefit plan? a. formal retirement plan that provides the participant with a fixed benefit upon retirement b. retirement plan that requires specific contributions by an employer to a retirement or savings fund established for the employee c. plan which allows employees to forgo specific benefits and receive the equivalent in increased pay d. plan in which employees may defer income up to a maximum amount allowed e. plan with an “escalator clause” that...
If an individual employee age 25 earning $45,000 per year has an opportunity to par 45,000...
If an individual employee age 25 earning $45,000 per year has an opportunity to par 45,000 per year has an opportunity to participate in an Proyer Sponsored 401(k) tax sheltered retirement account with the employer matching the first $2,400 of annual contributions made by the employee, compute the following: A. If the individual employee is in the 25% marginal income tax bracket and invests $2,400 per year into the employer provided 401(k) tax sheltered retirement account, how much will the...
Question 11 pts In Melvin's defined benefit plan, the actuary noted that life expectancy for retirees...
Question 11 pts In Melvin's defined benefit plan, the actuary noted that life expectancy for retirees of Melvin's defined benefit plan is increasing at an above average rate for the fifth year in a row. The impact on plan costs of this trend would be to lower plan costs. T/F? True False Flag this Question Question 21 pts Shurfine, Inc. has a defined pension plan for the benefit of its employees. Over the last five years, the assets of the...
You are 25 years old, having just started working. You are considering a retirement plan for...
You are 25 years old, having just started working. You are considering a retirement plan for a retirement at the age of 65. You want to be able to withdraw $76,000 from your savings account on each birthday for 20 years following your retirement at the age of 65. Your first withdrawal will be on your 66th birthday. To achieve your goal, you intend to make equal annual deposits in a pension scheme which offers 7% interest per year. According...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $46,000. She is trying to decide whether she should roll over her traditional IRA into a Roth IRA. Her current marginal tax rate is 25 percent. She plans to withdraw the entire balance of the account in 20 years and she expects to earn a before-tax rate of return of 5.6 percent on her retirement accounts and...
federal income tax question Each penalty They may each take a tax-free distribution of $5,000, for...
federal income tax question
Each penalty They may each take a tax-free distribution of $5,000, for a total of $10.000 Mark for follow up Question 9 of 10 The attributes of a Health Saving Account used as a retirement savings account includes which of the following? After age 65, all distributions are tax-free. The funds can accumulate year after year with no required minimum distribution An individual can contribute up to $7.000 a year. Individuals over age 50 may contribute...
Hi, Please help me to solve these questions with detail explanation . Thanks Question 4 Dustin,...
Hi, Please help me to solve these questions with detail explanation . Thanks Question 4 Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions) and her IRA is now worth $46,000. She is trying to decide whether she should roll over her traditional IRA into a Roth IRA. Her current marginal tax rate is 25 percent. She plans to withdraw the entire balance of the account in 20 years and she expects to earn a before-tax rate of return of 5.6 percent on her retirement accounts and...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $39,000. She is trying to decide whether she should roll over her traditional IRA into a Roth IRA. Her current marginal tax rate is 24 percent. She plans to withdraw the entire balance of the account in 20 years and she expects to earn a before-tax rate of return of 4.9 percent on her retirement accounts and...
If an individual employee age 25 earning $45,000 per year has an opportunity to par 45,000 per year has an opportunity to participate in an Proyer Sponsored 401(k) tax sheltered retirement account with the employer matching the first $2,400 of annual contributions made by the employee, compute the following: A. If the individual employee is in the 25% marginal income tax bracket and invests $2,400 per year into the employer provided 401(k) tax sheltered retirement account, how much will the...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $46,000. She is trying to decide whether she should roll over her traditional IRA into a Roth IRA. Her current marginal tax rate is 25 percent. She plans to withdraw the entire balance of the account in 20 years and she expects to earn a before-tax rate of return of 5.6 percent on her retirement accounts and...
federal income tax question
Each penalty They may each take a tax-free distribution of $5,000, for a total of $10.000 Mark for follow up Question 9 of 10 The attributes of a Health Saving Account used as a retirement savings account includes which of the following? After age 65, all distributions are tax-free. The funds can accumulate year after year with no required minimum distribution An individual can contribute up to $7.000 a year. Individuals over age 50 may contribute...
Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions) and her IRA is now worth $46,000. She is trying to decide whether she should roll over her traditional IRA into a Roth IRA. Her current marginal tax rate is 25 percent. She plans to withdraw the entire balance of the account in 20 years and she expects to earn a before-tax rate of return of 5.6 percent on her retirement accounts and...
Most questions answered within 3 hours.
-
The labor force minus the number of employed equals the number
of unemployed.
a. True
b....
asked 1 hour ago -
Determine the mass in units of grams [g] of 0.49 moles [mol]
of a new fictitious...
asked 2 hours ago -
A horizontal mass of M=5kg is on a spring and stretched to
x=0.5m when released from...
asked 3 hours ago -
26 of 50
"I have worked at the Arizona Humane Society for ten years, and
have...
asked 3 hours ago -
Compare and contrast zero based budgeting and incremental (or
base year) budgeting.
asked 3 hours ago -
4 pts 10. Which of the following hypothesis would be MOST
difficult to test experimentally? Group...
asked 3 hours ago -
A business owner makes 1,000 items a day. Each day he or she
contributes eight hours...
asked 3 hours ago -
A
circular loop in the plane of a paper lies inca0.65 T magnetic
field pointing into...
asked 4 hours ago -
A business owner is trying to decide whether to buy, rent, or
lease office space and...
asked 4 hours ago -
Thermal Storage Solar heating of a house is much more efficient
if there is a way...
asked 4 hours ago -
Considering the “fits” for group and job design dimensions,
suppose you had 12 employees with different...
asked 4 hours ago -
Consider TCP connection management.
How many segments are typically involved in the TCP connection
establishment? What...
asked 4 hours ago