Asked by Shaniek Wiltshier on Jul 22, 2024
Verified
What is an advantage of a qualified plan in retirement benefits?
A) immediate tax deductions for the funds employees contribute to the plan
B) taxable earnings on the money in the retirement fund
C) tax-free withdrawals for highly compensated employees
D) exemption of contribution from employees
E) a retirement plan that provides benefits exclusively to its owners and top managers
Qualified Plan
A retirement plan that meets the requirements of the Internal Revenue Code and ERISA, offering tax benefits to both employers and employees.
Tax Deductions
Expenses that can be subtracted from gross income to reduce the total amount of income tax owed.
Retirement Benefits
Financial support or services provided to employees after they exit the workforce, including pensions, health insurance, and other perks.
- Acquire knowledge on the legal dimensions and compliance prerequisites for benefits provision, including retirement plans and health insurance.
Verified Answer
LR
Lacey ReddickJul 24, 2024
Final Answer :
A
Explanation :
One advantage of a qualified plan in retirement benefits is that employees can receive immediate tax deductions for the funds they contribute to the plan. This can result in significant savings for the employee in terms of their annual income tax payments.
Learning Objectives
- Acquire knowledge on the legal dimensions and compliance prerequisites for benefits provision, including retirement plans and health insurance.