![]() There is immediate participant vesting in the entire balance.Įarly withdrawal (pre-age 59½) penalties may apply (with certain exceptions). Which of the following is (are) characteristics of both a SEP plan and a SIMPLE IRA? An investment in life insurance is prohibited. ![]() To establish a SIMPLE IRA, a business cannot have more than 100 employees (only counting those who earned $5,000 or more of compensation). The employer must notify participants that they have a 60-day election period just prior to the calendar year end in order to make a salary deferral election or modify a previous election for the following year. All eligible employees have the opportunity to make elective pretax contributions of up to $13,0 or $16,000 if age 50 or older. Which of the following statements regarding plan requirements for SIMPLE IRAs is CORRECT. In the year the participant attains age 70½. Penalty-free Section 457 distributions can only be made: For an in-service withdrawal. Plan sponsors of qualified plans, SEP plans, and SIMPLEs make contributions to either a trust, an insurance contract, or an individual retirement account depending on the type of plan. Assuming Myra has never before used her available catch-up allowance, what is the total maximum amount she can contribute to her TSA plan for 2019? $28,000 Which of the following statements describing how qualified plans are similar to SEP plans and SIMPLEs is (are) CORRECT? Qualified plans, SEP plans, and SIMPLEs all provide for deferred compensation. Myra wants to contribute the maximum amount possible to her TSA. Myra, age 52, has worked for XYZ Educational Opportunities ("The last word in not-for-profit education") for the past 18 years. The ability to defer up to $13,000 (2019) without regard to employee participation. What makes the SIMPLE IRA so attractive to business owners? There is no ADP testing. Generally, distributions from TSA/Section 403(b) plans are made only upon: Disability.Īttainment of age 59½. Must not discriminate in favor of highly compensated employees. What is the maximum amount possible that may be contributed to a simplified employee pension (SEP) on behalf of a participant for 2019? $56,000 Section 403(b)/TSA employer contributions: Must abide by the annual additions limit. ![]() Which of the following retirement plans, maintained by an employer, would also permit an eligible employer to establish a SIMPLE? Section 457 plan Which of the following regarding a SIMPLE is (are) CORRECT? A 25% early withdrawal penalty may apply to distributions taken within the first 2 years of participation in the SIMPLE IRA plan. Simplified employee pension (SEP) IRAs are primarily used by: Sole proprietorships. What is the maximum elective deferral limit for a Section 403(b)/TSA plan in 2019, assuming no catch-up provisions apply? $19,000 Which of the following statements regarding TSAs/Section 403(b) plans are CORRECT? The sponsor must be a tax-exempt organization that meets the requirements of Section 501(c)(3), a governmental organization, or public educational organization. Match dollar-for-dollar employee contributions up to 3% of employee's income, ORĬontribute at least a 2% non-elective contribution for each eligible employee. Which of the following SIMPLE IRA options are CORRECT? Employers can match employee contributions dollar-for-dollar up to 3%.Įmployers can contribute up to 2% non-elective contributions for each eligible employee.įor a SIMPLE IRA, an employer is required to satisfy one of two contribution formulas: SEP plan participation does not reduce or eliminate an employee's ability to fund an IRA.Įmployees who participate in a SEP plan are considered active participants in an employer-sponsored retirement plan for the tax year in which an employer contribution is made. How does simplified employee pension (SEP) plan participation affect an employee's IRA contributions? The deductibility of an active participant's IRA contribution depends upon his MAGI. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |