IRA Manual Overview Quiz

<p>Introducing the concept of IRAs and their establishment. (C)</p> Signup and view all the answers

<p>Glossary and Exercise Master (C)</p> Signup and view all the answers

<p>To clarify the meaning of various symbols used in the manual. (A)</p> Signup and view all the answers

<p>Defining the difference between traditional and Roth IRAs. (B)</p> Signup and view all the answers

<p>The specific requirements for opening an IRA. (A)</p> Signup and view all the answers

<p>$1,000 (C)</p> Signup and view all the answers

<p>A one-time $1,000 deposit (D)</p> Signup and view all the answers

<p>The IRA owner must have eligible compensation during the year for which the contribution is made. (A)</p> Signup and view all the answers

<p>The number of years the IRA owner will live (C)</p> Signup and view all the answers

<p>The IRA owner must have a Modified Adjusted Gross Income (MAGI) that falls within the IRS limits. (D)</p> Signup and view all the answers

<p>The current earnings rate (B)</p> Signup and view all the answers

<p>The financial organization's penalty for early withdrawals (B)</p> Signup and view all the answers

<p>They should consult a tax advisor to calculate their maximum contribution. (B)</p> Signup and view all the answers

<p>All of the above. (D)</p> Signup and view all the answers

<p>The IRA owner (A)</p> Signup and view all the answers

<p>$7,000 (A)</p> Signup and view all the answers

<p>Both Traditional and Roth IRA (B)</p> Signup and view all the answers

<p>$1,000 (D)</p> Signup and view all the answers

<p>Filing a joint tax return with Daphne (C)</p> Signup and view all the answers

<p>To obtain consent from the spouse if the trust or residence of the IRA owner is located in a community or marital property state. (B)</p> Signup and view all the answers

<p>To specify the percentage of the IRA balance that will be distributed to each beneficiary. (C)</p> Signup and view all the answers

<p>This statement assures the financial institution that the IRA owner is eligible to make the contribution. (B)</p> Signup and view all the answers

<p>Review the requirements for spousal consent and take necessary action. (D)</p> Signup and view all the answers

<p>Social Security Number (A)</p> Signup and view all the answers

<p>The IRA owner can list additional beneficiaries on a separate sheet of paper. (D)</p> Signup and view all the answers

<p>The IRA owner (D)</p> Signup and view all the answers

<p>The IRA owner's spouse may have a right to a portion of the IRA assets. (D)</p> Signup and view all the answers

<p>To help the individual make an informed decision about the type of IRA they wish to establish. (C)</p> Signup and view all the answers

<p>Traditional IRAs offer tax deductions on contributions, while Roth IRAs offer tax-free withdrawals in retirement. (C)</p> Signup and view all the answers

<p>To reduce the amount of income tax owed by individuals with low to moderate incomes. (A)</p> Signup and view all the answers

<p>Roth IRA (C)</p> Signup and view all the answers

<p>Saver's Match (D)</p> Signup and view all the answers

<p>Tax return (C)</p> Signup and view all the answers

<p>It is a refundable credit, meaning the individual may receive a portion of the credit back as a refund. (D)</p> Signup and view all the answers

<p>Traditional IRA (D)</p> Signup and view all the answers

An annual deposit made into an IRA, typically $1,000, on the first day of the year.

A one-time, $1,000 deposit made into an IRA from another retirement account.

The age the IRA owner will attain in the contribution year, crucial for projections.

The rate at which the IRA earns income, not exceeding the currently effective rate.

A fee assessed if the IRA owner makes a distribution, impacting account value projections.

Eligibility requires having eligible compensation in the contribution year.

Eligibility requires eligible compensation and MAGI within IRS limits.

Income that qualifies you to contribute to an IRA.

Modified Adjusted Gross Income used to determine Roth IRA contributions.

A tool to calculate maximum Roth IRA contributions based on MAGI.

Individuals designated to receive benefits first upon the IRA owner's death.

Beneficiaries who receive assets only if primary beneficiaries are deceased.

Identification numbers like Social Security Number or Tax Identification Number used for beneficiaries.

The specific portion of the account each beneficiary is entitled to receive.

Agreement required from a spouse in community or marital property states before making changes to the IRA.

States in which property acquired during marriage is jointly owned by both spouses.

An additional document that lists further beneficiaries not included in the main IRA form.

Qualifications that determine if an individual can make contributions to an IRA.

A tax credit for eligible contributions to retirement accounts.

Earnings withdrawn tax-free if certain conditions are met.

A replacement for the Saver’s Credit starting 2027, paid to retirement accounts.

Withdrawal from a Roth IRA meeting specific criteria for tax benefits.

Traditional IRA contributions may be deductible, reducing taxable income.

Process of opening an IRA by providing required documents and rules information.

Tax form used to report interest income from accounts including IRAs.

Include tax-deferred growth or tax-free withdrawals depending on IRA type.

A retirement account with tax-deductible contributions and tax-deferred growth.

A retirement account where contributions are made with after-tax income, allowing tax-free withdrawals.

Benefits that reduce taxable income or tax owed, available for IRAs.

Documents needed to establish an IRA, including identification and an application form.

The person designated to receive IRA assets after the account holder's death.

A person designated to receive IRA assets if the primary beneficiary cannot.

The ability to transfer funds from one IRA to another without tax penalties.

Withdrawals made from an IRA, subject to certain rules and penalties.

A contribution made by a surviving spouse to their own IRA if filing jointly in the year of death.

The maximum amount an individual can contribute to an IRA each year as set by the IRS.

An additional amount allowed for IRA contributions for individuals aged 50 and older.

In 2024, the total contribution limit is $8,000 for individuals aged 50 or older.

Both Traditional and Roth IRAs have similar contribution limits but differ in tax treatment.

Cost-Of-Living Adjustments; potential annual changes to IRA contribution limits due to inflation.