CRPC Questions and Answers 100% Solved
Max provisional income for SS Correct Answ_Single or head of househouse:
Tax-free if provisional income is less than 25k
Filing jointly:
Tax free if provisional income is less than 32k
Provisional income Correct Answ_Provisional income=AGI(excluding SS) +Nontaxable interest(muni bonds) + 1/2(SS benefit)
Single provisional income SS taxable % Correct Answ_25k-34k: 50%
34k+: 85%
Jointly provisional income SS taxable % Correct Answ_32k-44k: 50%
44k+:85%
maximum taxable SS amount Correct Answ_85% of Total SS benefit
,Spousal benefit Correct Answ_- Pay spouse a maximum of 50% of earners PIA
What tax funds the Social Security Trust Fund Correct Answ_Payroll taxes; FICA
What is the FICA tax; how is it split up Correct Answ_15.3%; The employer and employee each pay 6.2% for old-age, survivors and
disability insurance (OASDI) and 1.45% each for hospital insurance
Social Security Wage Base Correct Answ_$118,500
Covered employment Correct Answ_Any position that participates in social security system
Excluded
- Railroad employees
- Fed gov employees hired before 1984
Average SS benefit Correct Answ_$1300 pm
Max benefit Correct Answ_$2639 pm
,Quarter of Coverage Correct Answ_earned after $1260 of earnings in year
- most you can earn in 1 year is 4 credits in year
= $5040 in year
need 40 quarters of credit
Fully insured Correct Answ_Eligible for all SS benefits
- credits needed increase with age, up to max of 40
Currently insured Correct Answ_have earned at least 6 credits during previous 13 quarters before death/disability
- eligible for some survivor benefits
Average indexed monthly earnings Correct Answ_used to determine the amount of ss you will receive
- TOP 35 years of earnings/420 (months in 35 years) =AIME
** if client doesn't have 35 years, any missed years will be factored as 0's
Full Retirement Age (FRA) Correct Answ_born 1960 or later: 67
born 1937 or earlier: 65
, born 1943-1954: 66
Primary Insurance Amount (PIA) Correct Answ_Benefit received at full retirement age
- higher earners receive a smaller percentage of their AIME than low-wage earners-smaller "replacement rate"
- Annual COLA based on CPI
IRA statutory requirements Correct Answ_- individual must have compensation (earned income)
- must be established exclusively for an individual
- must be established as a custodial account or a trust set up in the US
- documents must be in writing
- contributions must be made in cash
- max contribution cannot exceed 100% of compensation or 5500
- contributions for given year must be made before April 15th tax deadline
- cannot be invested in life insurance
- RMDs must begin by april 1 in the year following turning 70.5
Penalty tax on excess contribution to IRA Correct Answ_- 6% penalty tax unless excess contribution and its earnings are withdrawn by tax
return filing due date
Max provisional income for SS Correct Answ_Single or head of househouse:
Tax-free if provisional income is less than 25k
Filing jointly:
Tax free if provisional income is less than 32k
Provisional income Correct Answ_Provisional income=AGI(excluding SS) +Nontaxable interest(muni bonds) + 1/2(SS benefit)
Single provisional income SS taxable % Correct Answ_25k-34k: 50%
34k+: 85%
Jointly provisional income SS taxable % Correct Answ_32k-44k: 50%
44k+:85%
maximum taxable SS amount Correct Answ_85% of Total SS benefit
,Spousal benefit Correct Answ_- Pay spouse a maximum of 50% of earners PIA
What tax funds the Social Security Trust Fund Correct Answ_Payroll taxes; FICA
What is the FICA tax; how is it split up Correct Answ_15.3%; The employer and employee each pay 6.2% for old-age, survivors and
disability insurance (OASDI) and 1.45% each for hospital insurance
Social Security Wage Base Correct Answ_$118,500
Covered employment Correct Answ_Any position that participates in social security system
Excluded
- Railroad employees
- Fed gov employees hired before 1984
Average SS benefit Correct Answ_$1300 pm
Max benefit Correct Answ_$2639 pm
,Quarter of Coverage Correct Answ_earned after $1260 of earnings in year
- most you can earn in 1 year is 4 credits in year
= $5040 in year
need 40 quarters of credit
Fully insured Correct Answ_Eligible for all SS benefits
- credits needed increase with age, up to max of 40
Currently insured Correct Answ_have earned at least 6 credits during previous 13 quarters before death/disability
- eligible for some survivor benefits
Average indexed monthly earnings Correct Answ_used to determine the amount of ss you will receive
- TOP 35 years of earnings/420 (months in 35 years) =AIME
** if client doesn't have 35 years, any missed years will be factored as 0's
Full Retirement Age (FRA) Correct Answ_born 1960 or later: 67
born 1937 or earlier: 65
, born 1943-1954: 66
Primary Insurance Amount (PIA) Correct Answ_Benefit received at full retirement age
- higher earners receive a smaller percentage of their AIME than low-wage earners-smaller "replacement rate"
- Annual COLA based on CPI
IRA statutory requirements Correct Answ_- individual must have compensation (earned income)
- must be established exclusively for an individual
- must be established as a custodial account or a trust set up in the US
- documents must be in writing
- contributions must be made in cash
- max contribution cannot exceed 100% of compensation or 5500
- contributions for given year must be made before April 15th tax deadline
- cannot be invested in life insurance
- RMDs must begin by april 1 in the year following turning 70.5
Penalty tax on excess contribution to IRA Correct Answ_- 6% penalty tax unless excess contribution and its earnings are withdrawn by tax
return filing due date
