Determine the tax-free portion of the pension

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Reference no: EM132665493

Problem 1: Jack, 60, retired in March on disability. Before retirement, his employer paid 100% of his disability insurance premiums and included the amount in his wages. Jack received a total of $5,800 disability benefits this year. How much of Jack's disability payments are taxable?

Select one:

a. $2,900

b. $5,800

c. $1,450

d. $ 0

Problem 2: Chuck is 65-years old and started receiving his pension in May 2019. Chuck contributed to his pension plan (after-tax dollars) over the years of his employment. Chuck wants to use the Simplified Method to determine his tax-free portion of the pension. Which of the following pension or annuity plans would not allow him to use the Simplified Method?

Select one:

a. Private annuity

b. Qualified employee plan

c. 403(b)

d. Qualified employee annuity

Reference no: EM132665493

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