Maxton Manufacturing, Inc. uses prior year testing to monitor discrimination in its Section 401(k) plan. Last year, the actual deferral percentage (ADP) for all nonhighly compensated employees at Maxton was 4%. This year, the ADP for highly compensated employees at Maxton can be as high as

Buster Keaton, owner of Keaton Property Management, Inc., wants to establish a bonus plan for his employees. Buster must

Tod Gristham, owner of Gristham Enterprises, wants to implement one retirement plan that will reduce turnover to about 2% a year, favor key employees, help forestall unionizing among his rank-and-file workers, and hold costs down to between 1% and 2% of company net profit. When you meet with Tod, which step of the employee benefit planning process is most important to cover with him?

The owner of Braxton Steel Corporation has been discussing installation of a legal services plan at Braxton. The owner has asked you to explain the features of an open-panel prepayment legal services plan. You reply

Will Hurt has an employer-provided health plan that has a $500 calendar-year deductible with a 3-month carryover provision. Will has $100 in medical bills in June that are covered by the plan. In late November, he has $100 additional medical expenses. Then in January, he has another $700 in medical expenses. Will’s health care plan will cover _____ of his expenses

Which of the following is (are) true regarding Section 401(k) plans?

Distributions from a traditional IRA cannot be made before the participant turns 59½ unless the IRA owner dies.

Which of the following options are good questions to ask about existing benefit plans?(I)Who is covered?(II)What benefits are provided?(III)How is the plan funded?(IV)Who administers the plan?

Jack Breem works for Metro Corp. Metro uses a calendar year accrual method of tracking financial transactions. Jack earned a bonus in December of this year. Which of the following is true?

Pam wants to use money from a traditional IRA for a down payment to purchase a first home. How much can she withdraw from her IRA without having to pay the federal early distribution penalty?