Earned income for purposes of an IRA contribution includes all of the following except: a. Tips...
Question:
Earned income for purposes of an IRA contribution includes all of the following except:
a. Tips are a form of earned income for purposes of making an IRA contribution.
b. Even though alimony is not earned by the recipient, it is treated as earned income.
c. Unemployment compensation is not treated as earned income for purposes of making an IRA contribution even though it can be received only if a taxpayer worked and earned income in the past.
d. Income from self-employment is a form of earned income for the purpose of making an IRA contribution.
IRA:
The IRA (Individual Retirement Account) is basically a tax saving initiative where investing in the IRA allows the individual to deduct the corresponding expense from the taxable income. The invested amount grows over the years and is repaid after retirement.
Answer and Explanation: 1
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Option C
Unemployment compensation is a financial support provided to the individual who have recently become jobless due to...
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Retirement Compensation Systems: 401(k) and Pensions
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Chapter 7 / Lesson 6
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Retirement Compensation systems are employed by companies to keep employees safe upon retirement. Learn more about defining contribution plans, read on examples of each type and the usage of cash payment plans, pensions and 401(k) plans.
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