TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
First dollar coverage rule - (ANSWER)for HSAs - insurer is prohibited from covering most health expenses
until the covered individual has paid the deductible amount out of pocket
exceptions: preventative care
health savings accounts - (ANSWER)participation in HRAs or FSAs will disqualify an individual from being
allowed to contribute
however, limited purpose FSA/HRA (dental/vision) are allowed
Tricare/Medicare disqualifies you as well
they have triple tax benefits
1) deduction for contributions 2) growth is tax deferred 3) distributions are tax & penalty free if used for
qualifying expenses
prioritize contributions to older spouse, expenses from younger spouse
individuals should stop contributions 6-7 months prior to 70th birthday and starting SSA benefits (which
includes enrolling in Medicare Part A)
traditional IRA essentials - (ANSWER)high income & active participation in ER sponsored plan must both
be present to eliminate the deductibility of a Traditional IRA contribution - no limit on the ability to make
the contribution, only the deductibility of it
report non-deductible IRA contributions on form 8606 - counts cumulative nondeductible contributions -
best practice is to always file form each year even when not required
IRA pro rata rule - (ANSWER)in the event an IRA owner has any after-tax amounts in their IRA, this rule
applies
,TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
the % of an IRA distribution that is tax-free is the same as the % of the after tax dollars the IRA owner has
in all their IRAs compared to the total amount of dollars in all their iRAs
potential strategy to roll over existing Traditional IRA $ into an ER plan - by rolling it into a 401k or similar
plan, an individual can effectively clear their iRA balance, allowing them to take advantage of the
backdoor Roth IRA without being impacted by the pro-rata rule in future years
Roth IRA requirements - (ANSWER)two requirements to contribute: must have compensation and be
subject to the income eligibility requirement that is adjusted for inflation each year
if married couples are considering contributions, they should contribute to the older spouse's first
because they will reach age 59 1/2 first and can take tax/penalty free distributions first
step transaction doctrine - (ANSWER)regarding backdoor roth ira contributions
a legal principle that basically says you cannot use multiple steps to do something that you can't do
directly in one step - however, most experts agree there is no minimum amount of time to wait until
converting funds
some go by the one statement rule - wait until the particular custodian has issued one statement
showing the contribution made inside the traditional IRA
529 to Roth - (ANSWER)"like to like" is the beneficiary of the 529 and the owner of the Roth IRA
the beneficiary of the 529 must have compensation - earned income of some kind for them to make this
contribution - however, the regular income limits that apply to direct Roth IRA contributions DO NOT
apply to this transfer
two holding periods must be satisfied: the 529 plan must have been in existence for 15 years and no $
contributed in the last 5 years or earnings on those funds can be transferred
,TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
there is a lifetime cap of $35k that can be transferred
Mega backdoor Roth essentials - (ANSWER)some plans offer after-tax plan contributions (not Roth salary
deferrals) - however, many plans do not offer this and the individual al must have room left to make the
contributions under the annual additions limit
1. client must have enough compensation to make these contributions
2. the after-tax contribution must pass testing (the Average Contribution Percentage test)
safe harbor plans allow individual to make salary deferrals up to the salary deferral limit, but do NOT
provide the same benefit for after-tax contributions - you CANNOT safe harbor your safe out of ACP
testing for after-tax contributions
the plan must allow for periodic in-service distributions - the in service distributions allow the
conversions to take place
coordinating contributions among employer plans - (ANSWER)can defer up to the total salary deferral
limit between multiple plans - even if they are different types of plans (401(k), 403(b) - cannot exceed
exception is for governmental 457 deferred compensation plan - the salary deferral limits are separate
the salary deferral limits for ER plans are coordinated across all plans
a single limit applies to every plan in which an individual participates
the overall limit is looked at separately for each plan as long as the employers are unrelated
FSA overview - (ANSWER)you should only count on medical expenses that you are likely to incur
, TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
employers may:
1) allow participants to roll over a limited amount of funds to next year
2) or spend amounts that were not used in previous year in the first 2 months of the year
eligibility typically ends of the individual's last day of employment, not the last day of the month of their
employment
any new medical expenses after date of separation will not be eligible for reimbursement from a
healthcare fsa
individuals who either plan to leave their ER or believe it is possible they may be terminated may wish to
limit contributions even more than normal
for limited purpose fsas, can only consider healthcare expenses that are eligible (dental or vision)
dependent care fsa - (ANSWER)designed to assist with dependent care - childcare, preschool, summer
camps, non-employer sponsored before and after school programs
also reduces both OI tax and fica taxes
there is NO rollover option - they are truly use it or lose it accounts
excess contributions to IRAs - (ANSWER)excess IRA contributions have a 6% penalty on the excess
contribution for each year it remains in the account
timely removal of excess contributions - removing it and net income attributable (NIA) by the tax return
deadline (including extensions so October 15th)
Exam |Already Graded A+
First dollar coverage rule - (ANSWER)for HSAs - insurer is prohibited from covering most health expenses
until the covered individual has paid the deductible amount out of pocket
exceptions: preventative care
health savings accounts - (ANSWER)participation in HRAs or FSAs will disqualify an individual from being
allowed to contribute
however, limited purpose FSA/HRA (dental/vision) are allowed
Tricare/Medicare disqualifies you as well
they have triple tax benefits
1) deduction for contributions 2) growth is tax deferred 3) distributions are tax & penalty free if used for
qualifying expenses
prioritize contributions to older spouse, expenses from younger spouse
individuals should stop contributions 6-7 months prior to 70th birthday and starting SSA benefits (which
includes enrolling in Medicare Part A)
traditional IRA essentials - (ANSWER)high income & active participation in ER sponsored plan must both
be present to eliminate the deductibility of a Traditional IRA contribution - no limit on the ability to make
the contribution, only the deductibility of it
report non-deductible IRA contributions on form 8606 - counts cumulative nondeductible contributions -
best practice is to always file form each year even when not required
IRA pro rata rule - (ANSWER)in the event an IRA owner has any after-tax amounts in their IRA, this rule
applies
,TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
the % of an IRA distribution that is tax-free is the same as the % of the after tax dollars the IRA owner has
in all their IRAs compared to the total amount of dollars in all their iRAs
potential strategy to roll over existing Traditional IRA $ into an ER plan - by rolling it into a 401k or similar
plan, an individual can effectively clear their iRA balance, allowing them to take advantage of the
backdoor Roth IRA without being impacted by the pro-rata rule in future years
Roth IRA requirements - (ANSWER)two requirements to contribute: must have compensation and be
subject to the income eligibility requirement that is adjusted for inflation each year
if married couples are considering contributions, they should contribute to the older spouse's first
because they will reach age 59 1/2 first and can take tax/penalty free distributions first
step transaction doctrine - (ANSWER)regarding backdoor roth ira contributions
a legal principle that basically says you cannot use multiple steps to do something that you can't do
directly in one step - however, most experts agree there is no minimum amount of time to wait until
converting funds
some go by the one statement rule - wait until the particular custodian has issued one statement
showing the contribution made inside the traditional IRA
529 to Roth - (ANSWER)"like to like" is the beneficiary of the 529 and the owner of the Roth IRA
the beneficiary of the 529 must have compensation - earned income of some kind for them to make this
contribution - however, the regular income limits that apply to direct Roth IRA contributions DO NOT
apply to this transfer
two holding periods must be satisfied: the 529 plan must have been in existence for 15 years and no $
contributed in the last 5 years or earnings on those funds can be transferred
,TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
there is a lifetime cap of $35k that can be transferred
Mega backdoor Roth essentials - (ANSWER)some plans offer after-tax plan contributions (not Roth salary
deferrals) - however, many plans do not offer this and the individual al must have room left to make the
contributions under the annual additions limit
1. client must have enough compensation to make these contributions
2. the after-tax contribution must pass testing (the Average Contribution Percentage test)
safe harbor plans allow individual to make salary deferrals up to the salary deferral limit, but do NOT
provide the same benefit for after-tax contributions - you CANNOT safe harbor your safe out of ACP
testing for after-tax contributions
the plan must allow for periodic in-service distributions - the in service distributions allow the
conversions to take place
coordinating contributions among employer plans - (ANSWER)can defer up to the total salary deferral
limit between multiple plans - even if they are different types of plans (401(k), 403(b) - cannot exceed
exception is for governmental 457 deferred compensation plan - the salary deferral limits are separate
the salary deferral limits for ER plans are coordinated across all plans
a single limit applies to every plan in which an individual participates
the overall limit is looked at separately for each plan as long as the employers are unrelated
FSA overview - (ANSWER)you should only count on medical expenses that you are likely to incur
, TPCP 101 Exam with all Correct & 100% Verified Answers |Actual Complete
Exam |Already Graded A+
employers may:
1) allow participants to roll over a limited amount of funds to next year
2) or spend amounts that were not used in previous year in the first 2 months of the year
eligibility typically ends of the individual's last day of employment, not the last day of the month of their
employment
any new medical expenses after date of separation will not be eligible for reimbursement from a
healthcare fsa
individuals who either plan to leave their ER or believe it is possible they may be terminated may wish to
limit contributions even more than normal
for limited purpose fsas, can only consider healthcare expenses that are eligible (dental or vision)
dependent care fsa - (ANSWER)designed to assist with dependent care - childcare, preschool, summer
camps, non-employer sponsored before and after school programs
also reduces both OI tax and fica taxes
there is NO rollover option - they are truly use it or lose it accounts
excess contributions to IRAs - (ANSWER)excess IRA contributions have a 6% penalty on the excess
contribution for each year it remains in the account
timely removal of excess contributions - removing it and net income attributable (NIA) by the tax return
deadline (including extensions so October 15th)
