Reference no: EM132479714

Question 1: Hank has contributed more than the maximum allowable amount to his IRA. What is the penalty for excess contributions to an IRA?

a) 6% on the account balance in the year the excess is deposited

b) 6% per year on the excess amount for as long as the excess remains in the account

c) 6% on the excess amount in the year the excess is deposited

d) 6% per year on the account balance for as long as the excess remains in the account

Question 2: Grayson works for a small business. His employer establishes a SIMPLE IRA for each employee's retirement. What retirement plan are contributions to a SIMPLE IRA made?

a) A traditional IRA

b) A Roth IRA

c) A designated SIMPLE IRA plan

d) A 401(k) plan

Question 3: Michael paid the following taxes during the year. What is the total tax amount Michael will be allowed to deduct on Schedule A line 9? (Michael is including his foreign taxes paid on Schedule A.)

Real estate taxes: 3,500 State income taxes:                                   5,850

Personal property tax on his vehicle:                                                580

FEDERAL INCOME TAXES :                                                               $12,000

FOREIGN TAXES: $200 VEHICLE LICENSE FEE:                                         $50

a) $22,130

b) $10,180

c) $ 9,930

d) $10,130