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FIN332
FINAL EXAM
8 cards·by lferrer93
What is a deductible IRA contribution?
Lowers taxable income in the year it was made
What is an advantage of making a nondeductible IRA contribution?
Allows a tax deferral on investment income
Who can make a deductible IRA contribution?
Singles and married couples not covered by an employer pension or if either types have lower
incomes
What is the penalty for withdrawing IRA funds before 59.5 years old?
Money taken out will be taxed by 10% on top of ordinary income tax
What are the maximum IRA contribution limits for under and over 50 years old?
5,500 and 6,500
What is a rollover?
This occurs when money from an IRA or other plan is placed with a new trustee. Could happen if an
employee switches jobs
When do you have to start withdrawing funds from an IRA account?
Must start making RMDs at 70.5 years old
What are some ways you can withdraw funds from an IRA account without penalty?
Disability, college tuition, purchase of 1st home, medical expenses & death distribution to
bene