Question
1. Dean has earned $71,500 annually for the past five years working as an architect for WCC Inc. Under WCC's defined benefit plan (which uses
1. Dean has earned $71,500 annually for the past five years working as an architect for WCC Inc. Under WCC's defined benefit plan (which uses a seven-year graded vesting schedule) employees earn a benefit equal to 3.5 percent of the average of their three highest annual salaries for every full year of service with WCC. Dean has worked for five full years for WCC and his vesting percentage is 60 percent. What is Dean's vested benefit ?
2. Chevonne is 60 years of age and self-employed. During 2020 she reported $134,000 of revenues and $53,600 of expenses relating to her self-employment activities. If Chevonne has no other retirement accounts in her name, what is the maximum amount she can contribute to a simplified employee pension (SEP) IRA for 2019?
Lisa, age 47, needed some cash so she withdrew $52,500 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,500 to her account. What amount of the distribution is taxable and subject to early distribution penalty?
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