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Tax Topic 22 - Contributions for IRAS and Pension Plans
In this tax topic you will learn about individual retirement arrangements (IRAs). You will learn the advantages of setting up an IRA. An IRA is a personal savings plan that provides you with tax advantages for setting aside money for when you retire. These advantages are contributions being partially or fully deductible and amounts that you put in IRAs are not taxed until distributed and there it is possible that these amounts will not be taxed at all if distributed according to the rules. Here, you will learn rules to follow in setting up an IRA, contributing to an IRA, transferring money or property to and from an IRA, handling an inherited IRA, receiving distributions from an IRA, and taking a credit for contributing to an IRA. In addition, you will also become aware of penalties and additional taxes that apply if rules are not followed. 

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Student Instructions: Complete the following 3 steps:

  1. Read the reading material and answer the questions on this page.

  2. Assignment Pending...Submit the answers to the Assignment online (the questions on this page). Scroll down for all questions on this page. When you are ready to submit click on the Assignment link. (These questions may appear again on the quiz online).

  3. Complete a quiz on the reading material: Quiz Online. You have 60 minutes to complete 40 questions for this quiz. You must study the reading material. You won't have time to look up questions in the reading material. If you don't pass, you can retry only after 24 hours have passed. - Every time you try the questions will be different. You will be disqualified from completing this topic if you do not  allow the proper 24 hours in between tries. If you are disqualified, you will notified through email of the substitute topic to complete.

Important: If you fail a topic you can try again until you pass. However, you cannot try that same quiz or assignment again until 24 hours later. This will give you enough time to study and review the reading material.

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

Please use IRS Publication 590 and Form 1040 Instructions (Form 1040 instructions only up to page 98) to complete this tax topic.

Please note: Form 1040 Instructions (Form 1040 instructions only up to page 98) will be used for the rest of the topics in the initial tax preparer certification course. You will be responsible to answer questions from the Form 1040 instructions booklet (up to page 98) on every topic so read it carefully.

 

Tax Return Situation 1:

 

1. This is a qualified employer plan (retirement plan) that can maintain a separate account or annuity under the plan to receive voluntary employee contributions.

A. A traditional IRA.
 B. A deemed IRA.
 C. A Roth IRA.
 D. Any of the above.

2. What would be a tax advantage of an Individual Retirement Account (IRA)?

A. Contributions you make to an IRA may be fully or partially deductible.
B. Generally, amounts in your IRA are not taxed until distributed.
 C. Sometimes amounts are not taxed at all if distributed according to the rules.
 D. Any of the above.

 

 
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Revised: 11/22/17