Chapter 13 Retirement Savings and Deferred Compensation

| November 9, 2018

82.

Kathy is 48
years of age and self-employed. During the year she reported $100,000 of
revenues and $40,000 of expenses relating to her self-employment activities.
If Kathy has no other retirement accounts in her name, what is the maximum amount
she can contribute to an individual 401(k)?

A.

$11,152

B.

$16,652

C.

$28,652

D.

$52,000

83.

Kathy is 60
years of age and self-employed. During the year she reported $400,000 of
revenues and $100,000 of expenses relating to her self-employment activities.
If Kathy has no other retirement accounts in her name, what is the maximum
amount she can contribute to an individual 401(k)?

A.

$52,000

B.

$57,500

C.

$75,246

D.

$57,746

84.

Kathy is 48
years of age and self-employed. During the year she reported $400,000 of
revenues and $100,000 of expenses relating to her self-employment activities.
If Kathy has no other retirement accounts in her name, what is the maximum
amount she can contribute to an individual 401(k)?

A.

$52,000

B.

$57,500

C.

$75,246

D.

$79,787

85.

Which of the
following taxpayers is most likely to qualify for the saver’s credit?

A.

A low AGI
taxpayer who does not contribute to any qualified retirement plan.

B.

A low AGI taxpayer
who contributes to her employer’s 401(k) plan.

C.

A high AGI
self-employed taxpayer.

D.

A high AGI
employee who does not contribute to any qualified retirement plan.

86.

Amy is
single. During 2014, she determined her adjusted gross income was $12,000.
During the year, Amy also contributed $2,500 to a Roth IRA. What is the
maximum saver’s credit she may claim for the year?

A.

$1,250

B.

$2,500

C.

$1,000

D.

$0

87.

Amy is
single. During 2014, she determined her adjusted gross income was $12,000.
During the year, Amy also contributed $1,500 to a Roth IRA. What is the
maximum saver’s credit she may claim for the year?

A.

$750

B.

$1,000

C.

$1,500

D.

$0

88.

Amy files as
a head of household. She determined her 2014 adjusted gross income was
$70,000. During the year, she contributed $2,500 to a Roth IRA. What is the
maximum saver’s credit she may claim for 2014?

A.

$1,000

B.

$2,000

C.

$2,500

D.

$1,250

E.

$0

89.

What is the maximum
saver’s credit available to any taxpayer in 2014?

A.

$2,000

B.

$1,000

C.

$500

D.

It depends
on the filing status of the taxpayer

Essay Questions

90.

Joan recently
started her career with PDEK Accounting, LLP which provides a defined benefit
plan for all employees. Employees receive 1.5 percent of the average of their
three highest annual salaries for each full year of service. Plan benefits
vest under a 5-year cliff schedule. Joan worked 4½ years at PDEK before
leaving for another opportunity. She received an annual salary of $49,000,
$52,000, $58,000 and $65,000 for years one through four, respectively. Joan
earned $35,000 of her $70,000 annual salary in year five. What is the vested
benefit Joan is entitled to receive from PDEK for her retirement?

91.

Joan recently
started her career with PDEK Accounting, LLP which provides a defined benefit
plan for all employees. Employees receive 1.5 percent of the average of their
three highest annual salaries for each full year of service. Plan benefits
vest under a 5-year cliff schedule. Joan worked 5½ years at PDEK before
leaving for another opportunity. She received an annual salary of $49,000,
$52,000, $58,000, $65,000, and $75,000 for years one through five respectively.
Joan earned $40,000 of her $80,000 annual salary in year six. What is the
vested benefit Joan is entitled to receive from PDEK for her
retirement?

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