Problem 14-5 Calculating Maximum Contributions [LO5]
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- QUESTION 7 Sherry, age 34, participates in a defined contribution plan. The plan uses 5-year cliff vesting. She has worked at her employer for 3 years. In total, she has made employee contributions of $30,000. Her employer has matched 70% and made an additional $21,000 cont ribution. Sherry decides to close the plan and fully withdraw everything. How much does Sherry's tax increase due to this withdrawal? She is in the 24% marginal tax bracket. $17,340 $12,240 $7,200 $10,200Exercise 12-16 (LO. 4) Samuel and Annamaria are married, file a joint return, and have three qualifying children. In 2022, they earn wages of $34,000 and no other income. Round your intermediate computations to the nearest dollar. Click here to access the Earned Income Credit and Phaseout Percentages Table. Determine the amount of their earned income credit for 2022. 6,935 XQ24 Javier participates in a defined benefit pension plan at his place of employment. His projected monthly benefit under the plan is $1,000. If the plan provides life insurance for Javier, the death benefit payable under the policy is limited to a. $100,000. b. $25,000. c. $ 1,000. d. $10,000.
- 17 Richard has just received his first paycheque. He notices a deduction for Canada Pension Plan (CPP) contributions and asks his father to explain the CPP. All of the following statements are true, EXCEPT: Oa) For an individual who earns less than the YMPE, the Canada Pension Plan retirement benefit at 65 is calculated as one-third of his or her average pensionable earnings adjusted for inflation. b) The Canada Pension Plan provides monthly pensions to widows, widowers and orphaned children of deceased contributors. Oc) Richard will not make any CPP contributions on income over the YMPE. d) Richard will not be eligible for any retirement benefits unless he continues to Contribute to the program. for at least five years. OQuestion 13. Dr Kapoor has contributed $10,000 yearly into an RRSP from age 25 to 50 (25 deposits). At age 50, he makes no further contributions. At age 65, he purchases an annuity to pay himself a monthly pension for the next 30 years, first payment due in one month. Find the amount of the pension if from age 25 - 65 interest rates were 7% c.a. and his pension earns 4% c.m. All work must be shown to earn full marks. Paragraph BIUProblem 11-62 (LO 11-5) Pablo and his wife Bernita are both age 58. Their combined AGI is $83,000. Neither is a participant in an employer-sponsored retirement plan. They have been contributing to a traditional IRA for many years and have built up an IRA balance of $100,000. They are considering rolling the traditional IRA into a Roth IRA. Required: a. Is the couple eligible to make the conversion? b. Assume that the couple does not make the conversion but, instead, establishes a separate Roth IRA in the current year and properly contributes $3,000 per year for four years, at which point the balance in the Roth is $21,000 (contributions plus investment earnings). At the end of four years, they withdraw $22,000 to pay for an addition to their house. What is the amount of withdrawal that is taxable, if any? c. Assume same facts as in requirement b, except that they instead withdrew only $6,000. What is the amount of withdrawal that is taxable? d. What if the $22,000 withdrawal is used to…
- Question 18 Mary is a 47-year old corporate attorney. She earns $225,000 per year and receives group term life insurance coverage equal to two times her salary from her employer. Asume the plan is not disciminatory. How much Section 79 income must Mary report this year? $26.25 $60.00 $720.00 $810.00 Use the following information to answer the next three questions: Your client reports the following details to you: Income from Job of $125,000 Reinvested Municipal Bond Interest of $7,000 Additional Dedicated Expenses of $56,000 ● ● ● Discretionary Expenses of $74,300 Monetary Assets of $150,000 Investment Assets of $100,000 Retirement Assets of $130,000 A Home worth $345,000 Credit Card Liabilities of $27,000 Other Debt of $98,000Question 13 11. During 2020, a person receives Social Security at age 63 and is earning $23,000/year at a part- time position, how much of their allotted $12,000 yearly Social Security payments would they receive? Assume $12,000 is the amount after deducting the early withdraw penalty. Question 14 12. From the question above, now assume the individual is 71 years old. How much of the yearly $12,000 would they receive while still earning $23,000 from their part-time position? Question 15 13. At retirement age in 2020, an individual has an average yearly indexed income of $40,000. How much would their monthly Social Security check be worth using the PIA formula? *Do not use dollar signs*47. Clint's employee benefits include family health insurance. She contributes 20% to the cost of coverage. She is paid monthly and $150 is taken out of her paycheck for this benefit. How much does her employer contribute annually for her policy? A. $9,000 B. $2,250 C. $7,200 D. $1,440
- Question 2 Leslie, age 27, is an employee of Naples Corp. which provides the following nondiscriminatory fringe benefits received in 2021: insurance premiums of $1,050 for salary continuation payments. Under the plan, Leslie will receive her regular salary in the event she is unable to work due to illness. Leslie collected $7,100 on the policy to replace lost wages while she was ill during the year. • $5,500 tuition under a plan available to all full-time employees. Leslie is a part-time student working on her bachelor's degree in accounting. • hospitalization insurance premiums for Leslie and family. The cost of the coverage for Leslie is $3,000 per year, and the additional cost for dependents is $3,775 per year. The plan has a $2,000 deductible, but Naples contributed $1,500 to the Health Savings Account (HSA). Leslie withdrew only $1,000 from the HSA, and the account earned $6.92 interest during the year. For each of the following, what is the amount to be included in Leslie's gross…Question 2: Bill is due to retire in 20 years, at which time he will start collecting pension benefits. His employer is scheduled to begin funding Bill's pension benefits with the first annual payment due at the end of year 1 and the last annual payment due at the end of year 20. The initial employer's contribution is $2,000 and will increase by 3% per year. Employer contributions will earn interest at an annual effective interest rate of 7%. Bill's employer can elect alternative funding: annual contributions beginning at the end of year 6 with the last contribution at the end of year 20. These annual contributions begin at $1,000 and increase by $Q per year. Under this alternative funding, the employer's contribution will earn an annual effective interest rate of 8%. Determine Q so that both funding options have the same accumulated value at the end of year 20. Multiple Choice: (а) 500.50 (b) (c) (d) (e) 465.20 508.50 513.30 498.30LO2 Joyce Lee earns 30,000 a year. Her employer pays a matching Social Security tax of 6.2% on the first 118,500 in earnings, a Medicare tax of 1.45% on gross earnings, and a FUTA tax of 0.6% and a SUTA tax of 5.4%, both on the first 7,000 in earnings. What is the total cost of Joyce Lee to her employer? (a) 32,295 (b) 30,000 (c) 30,420 (d) 32,715