Exam (elaborations)
TAX 4001 Exam 1- chapter 3 (1)
TAX 4001 Exam 1- chapter 3 (1)
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TAX 4001 Exam 1- chapter 3Deemed substantiation - ANS-Employers give employees per diem to spend- so
employees do not need proof of their expenses. MUST USE THE LESSOR OF: the per
diem rate by company or federal per diem rate
What is an accountable plan? What are the two requirements of employees? -
ANS-Expenses incurred by employees are reimbursed by employer- so employees
report no expenses.
Requirements:
1- must return any excess reimbursement
2- must substantiate expenses (maintain records of)
What is the 'catch up' amount for 401k plans for people over 50? - ANS-up to $6500 on
top of the $19,500 cap per year
What is the 'catch up' amount for IRAs for people over 50? - ANS-$1000 on top of
$6000 max for every year over 50
What are the requirements to withdraw from a Roth IRA - ANS-1- at least 50 1/2 year
old
2- held for at least 5 years
3- because of a disability
4- to pay for first home
5- to pay to the beneficiary of IRA holder upon death
What is the max amount per year that can be deposited into an IRA (both roth and
traditional) - ANS-$6000
What is the difference in how Roth and Traditional IRA contributions and distributions
are taxed? - ANS-Roth: contributions are taxed, distributions are not
Traditional: contributions are not taxed, distributions are taxed
What kind of deductions are with holdings for 401k plans - ANS-With holdings from
income are not for or from AGI deductions
What qualifications must be met for a business meal to be qualified as deductible -
ANS-1- expense must be reasonable (not lavish or extravagant)
2- Taxpayer is present at the meal
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