What is the tax treatment of canadian social security

Reference no: EM133335502

Assignment:

Question 1. Joe (55) and Gail (49) are filing jointly for 2021. Joe earned $40,000, and Gail earned $2,500. Joe may contribute up to $7,000 to his IRA for 2021. If Joe contributes $5,000 to his IRA, how much can they contribute to Gail's IRA for 2021?

a. $2,000

b. $6,000

c. $7,000

Question 2. Mario is a fireman for Your City. Which of the following types of retirement plans would he contribute to through his employer?

a. 401(k).

b. 457

c. IRA.

Question 3. What is the tax treatment of Canadian social security benefits in the U.S?

Canadian social security benefits are:

a. Not taxable in the U.S.

b. Taxed as a pension using the simplified method.

c. The same as U.S. social security benefits and reported like U.S. social security benefits.

Question 4. Which of these would be an exception to the early retirement distribution penalty?

a. A 401(k) distribution used to pay higher education costs.

b. An IRA distribution to pay off credit card debt.

c. A 401(k) distribution made to an alternate payee under a qualified domestic relations order (QDRO).

Question 5. Harry (65) retired this year and began taking distributions from his 401(k). Contributions to his 401(k) were made over the course of his career through a combination of before-tax contributions, after-tax contributions, and employer matching. How should Harry determine the taxable amount of his distribution?

a. All of Harry's distributions will be taxable because a 401(k) is a qualified plan.

b. Distributions from a 401(k) plan are always tax-free.

c. Harry should use the Simplified Method to determine how much of his distribution is attributable to the return of cost basis.

Question 6. Which of the following taxpayers may potentially qualify for the Retirement Savings Contributions Credit (Saver?s Credit)? (Assume that all are over the age of 18, not claimed as a dependent on another's return, and not a student.)

a. Alice and John are a married couple filing a joint return. Their modified adjusted gross income is $42,762. Alice contributed to a Roth IRA.

b. Maurice will use the head of household filing status. His modified adjusted gross income is $54,000. He contributed to a traditional IRA.

c. Victoria and Evan are a married couple filing a joint return. Their modified adjusted gross income is $72,000. Victoria made voluntary contributions to her company's 401(k) plan.

Reference no: EM133335502

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