q1

Which of the following statements is false about health savings accounts (HSAs)?

a. Distributions from HSAs which are used for qualifying medical expenses are not subject to tax or penalty.

b. Deductible contributions to HSAs are unlimited.

c. Taxpayers qualifying for Medicare do not qualify to make HSA contributions.

d. Distributions from HSAs which are not used for medical expenses are generally subject to a 20 percent penalty and income taxes.

e. HSAs must be paired with qualifying high-deductible health insurance.

q2

Which of the following is not an exception to the 10% early withdrawal penalty of a traditional IRA:

a. Using the withdrawals for medical expenses in excess of 7.5 percent of their AGI, for persons younger than 59 years old

b. Paying the costs of higher education, including tuition, fees, books, and room and board for a dependent child

c. Withdrawing up to $30,000 of first-time home-buying expenses

d. Over 59 years old

q3

Under the SEP plan provisions, deductible contributions to a qualified retirement plan on behalf of an employee whose net earned income is $20,000 are limited to:

a. $1,500

b. $4,000

c. $5,000

d. $2,000

e. None of these choices are correct.

q4

In 2018, which of the following miscellaneous deductions are not subject to the 2 percent of adjusted gross income limitation and remain deductible?

a. Investment expenses

b. Unrecovered annuity costs at death

c. Unreimbursed employee business expenses

d. Union dues

e. None of these choices are correct.