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1.
If your income is below $32,000, your Social Security benefits will not be taxed.
False. It depends on your filing status. If your income is above $25,000 (single) and $32,000 (joint), your Social Security benefits can be taxed at 50 to 85 percent.
2.
Distributions you receive from ordinary qualified retirement and IRA accounts are taxed at what rate upon withdrawal?
Your regular income tax rate. Distributions are taxed at your regular income tax rate -- a fact that may call for some tax planning on your part.
3.
Which of the following is not true about a joint annuity?
It pays any estate taxes on the taxable amount. It is recommended that an insurance policy be used in conjunction with the annuity to cover taxes.
4.
To lower your minimum required retirement distribution, you can use only the joint life expectancy of you and your spouse.
True. You can use only the joint life expectancy table for you and a spouse who is 10 or more years younger as beneficiary to lower your minimum required distribution.
5.
Going over the contribution limit in your retirement account will lead to a _______ tax penalty.
6 percent. This penalty is meant to discourage overcontributing.