Author: Anonymous

Amounts deferred under nonqualified deferred compensation are never subject to Social Security taxes or Medicare taxes.

An employer can make contributions to the SIMPLE IRA of an employee who is 72 years old.

Ann has a Roth IRA. She died this year. Her son Jim is the designated beneficiary. Jim is not required to start minimum distributions next year because Roth IRAs are not subject to the required minimum distribution rules after death.

Objectives that employers have for benefit plans include

A tax deferred annuity is not subject to Section 415 limits.

June Tandy is covered under a SIMPLE IRA at Barker Jones Auction House where she is employed. This year, no salary deductions or employer contributions were allocated to her SIMPLE IRA. If June makes a contribution to her personal IRA this year, her deduction limit will be based on those applying to a person who is not an active participant in a qualified retirement plan.

Which of the following are advantages of cash compensation?(I)it must meet the reasonableness test for deductibility(II)it is easier to budget than non-cash benefits(III)ERISA regulations are not normally involved(IV)cash compensation paid currently is currently taxable as ordinary income

An employee can use an employer-provided legal service plan to obtain legal advice on a divorce proceeding.

In addition to elective salary reduction contributions, which of the following may be used as an alternative for making contributions into a 401(k) plan?

Bane Industries, Inc. has 1,000 employees. The average age of the workforce at Bane is 45, and 80% of the workers earn a mid-range income. Ten percent of workers are highly compensated, and 10% of workers are low-wage workers. Advantages of using a cash balance plan at Bane Industries include