Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
If the contributions you make to your IRA are taxed this year, they will be _______ when you withdraw them.
Non-taxable. They can be taxed only once.
2.
This year Robert, age 40, contributed $1,000 more than the allowed limit to his IRA. How much will he have to pay in penalty taxes?
$60. He must pay 6 percent of the excess. Six percent of $1,000 is $60.
3.
Your income never plays a part in how much of your IRA contributions you can deduct from your taxable income.
False. Your income plays a part if you are also covered by an employer-sponsored retirement plan.
4.
If you want to contribute to your IRA for this year, you have until December 31 to do it.
False. You have until April 15 (or the official tax day) of NEXT year to contribute.
5.
Excess IRA contributions may be taxed.
True. This is done to discourage excess contributions.
6.
Which of the following is not allowed to fund an IRA?
Cash value life insurance. Neither this nor collectibles are allowed as IRA investments.
7.
The IRA deductibility phase-out point for the spouse covered by another employee retirement plan is higher than the one for the non-covered spouse.
False. The non-covered spouse has the higher phase-out point, since he or she does not have the benefit of another retirement plan.
8.
Individuals must take distributions from their traditional individual retirement accounts at least once per year after they reach the age of _______.
73. This is a requirement for traditional IRAs. Prior to 2023, the required age was 72.
9.
If you are contributing to an IRA and you are also covered by an employer retirement plan, your ability to tax-deduct your contributions to an IRA is limited by your _______.
Adjusted gross income. Once your adjusted gross income reaches a certain level, your ability to deduct your contributions begins to be limited.
10.
How many times per year may an IRA be rolled over?