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In order to open a Health Savings Plan (HSA) account, a taxpayer must qualify under which category:

A.) A self-employed individual.

B.) Any one of these.

C.) An uninsured employee of a company that does not offer health coverage, who purchases high-deductible health coverage on his or her own.

D.) An employee (or spouse) who works for an employer with a high deductible health plan.

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Jarrod Robel
Jarrod RobelLv2
28 Sep 2019

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Please complete the problems below, and submit your answers tothe Week 7 Dropbox. See the Syllabus section “Due Dates forAssignments & Exams” for due date information. Please useproper spelling and grammar in your response.

Please choose one of the following (1, 2, or 3), and respond tothe questions.

For employees available to participate in a pensionplan

Does your employer offer a retirement plan at work? If so,answer the following.

What type of plan is it? Defined benefit or definedcontribution?*

If defined contribution, what type?

401(k)

403(b)

Employee stock ownership plan

Profit-sharing plan

Does your employer “match” your contribution? If so, what is thematch?

What are the benefits to you (the employee) of participating inthis plan?

Are there limits to how much you can contribute to the plan?

Does it have a Roth feature?

What are the benefits to your employer for offering thisplan?

If you are not contributing, why?

* If you do not know the answer to these questions, then askyour HR or payroll department for the answers. Please do notguess.

For employees without a pension plan atwork

If your employer does not offer a retirement plan at work, thenemployees have some options for accumulating retirement savings ontheir own.

Discuss the nonemployer plan retirement saving opportunitiesavailable to an employee.

Are you currently contributing to a nonemployer plan?

If yes, what type?

What is the benefit to you as an employee for saving for yourretirement?

Are there limits to how much you can contribute to the plan?

If you are not contributing, why?

For the self-employed

Are you self-employed? If yes, address the following.

What retirement savings opportunities are available to theself-employed?

Are there limits to how much you can contribute to the plan?

Do you currently contribute to a self-employed plan?

If so, what kind?

What are the tax benefits to a self-employed person for makingcontributions?

If you are not contributing, why?

For the nonworking taxpayer

If you do not have a job and you are not self-employed, thenchoose one of the following.

Please address questions 1, 2, or 3 above based on an interviewyou have conducted with your spouse, and describe a spousalIRA.

If you are unmarried, please address questions 1, 2, or 3 abovebased on an interview with one of your parents.

If neither of the above options is possible for you, pleaseinterview a friend, and address questions 1, 2, or 3 above.

Please build the answer in your own words based on flowing textfrom studding book (provide the example):

text from book:

Group Term Life Insurance Plans.

Many employers offer group term life insurance as part of theiremployee benefit package. Life insurance coverage is normallycalculated as a multiple of the employee’s annual salary, roundedup to the nearest thousand ($1,000.00). The premiums paid by theemployer for coverage under a group term life insurance policy areconsidered a taxable benefit to the employee. If the employershares the premium cost with the employee, for example, theemployer pays half and the employee pays half, then the taxablebenefit would only be the portion of the premiums the employerpays, or 50%. Group term life insurance taxable benefitcalculations are based on the premium rates and sales taxes theemployer pays and the amount of coverage provided. Premium ratesare expressed per $1,000.00 of coverage on a monthly basis. Thetaxable benefit must be calculated on a pay period basis forinclusion in the employee’s taxable income.

The following formula calculates the employee’s monthly taxablebenefit:

Coverage amount = Annual salary x coverage multiplier Roundcoverage amount up to nearest $1,000.00 Monthly taxable benefit =Coverage amount x premium rate $1,000.00 To ensure that the benefitis included in the employee’s income as it is earned or enjoyed,the monthly benefit must be annualized and then prorated on a payperiod basis, as follows: Pay period taxable benefit = Monthlytaxable benefit x 12 Pay period frequency

"Example: Rhonda Gold’s life insurance coverage, through heremployer’s group plan is two times her annual salary of $30,300.00.Her employer pays the insurer 100% of the cost of her lifeinsurance coverage at a premium rate of $1.00 per $1,000.00 ofcoverage per month. Rhonda is paid on a weekly basis; her taxablebenefit is calculated as follows: Coverage amount = Annual salary xcoverage multiplier Round coverage amount up to nearest $1,000.00 =($30,300 x 2) = $60,600.00 = $61,000.00 (rounded) Monthly taxablebenefit = coverage amount x premium rate $1,000.00 = $61,000 x$1.00 $1,000.00 = $61.00"

Group Sickness and Accident Insurance Plans.

These are group plans that provide employees with income for aperiod of time, should the employee be away from work for reasonsof sickness or accident. A group plan is generally one thatprovides coverage to a class or association of employees. There canalso be multiple plans for a group of employees, for example, oneplan for clerical staff and one for management staff. The types ofsickness and accident insurance plans considered in this categoryinclude:

? short term disability plans (wage loss replacement, weeklyindemnity)

? long term disability plans

? accident insurance plans (accidental death anddismemberment)

If an employer pays the premiums for group short-term orlong-term disability plans there is no taxable benefit implicationfor the employee, however employer-paid accidental death anddismemberment (AD&D) premiums are considered a non-cash taxablebenefit. As a result, employer-paid AD&D premiums, plus the 8%RST (Manitoba and Ontario), the 9% tax on insurance premiums(Québec) and the 6% PST (Saskatchewan) as applicable, areconsidered pensionable for C/QPP contributions and taxable forfederal and provincial income taxes. Employer-paid premiums for anon-group plan are considered a non-cash taxable benefit in alljurisdictions. A non-group plan is one that generally does notcover a group or association of employees. For example, if theorganization pays the premiums for a long-term disability plan foronly the president of the organization, this would be considered anon-cash taxable benefit to the president. When the benefit istaxable it is also pensionable for C/QPP contributions; however, asit is a non-cash benefit, it is not insurable, and no EI or QPIPpremiums are deducted. GST and HST are not included in the value ofthis type of benefit, but the provinces of Manitoba, Ontario,Québec and Saskatchewan assess sales tax on AD&D insurancepremiums.

Question : Your organization, located in Manitoba,will be enhancing the group benefits plan offered to employees intwo months by adding accidental death and dismemberment (AD&D)coverage and vision care coverage. The organization will pay 50% ofthe cost of the AD&D premiums and 50% of the cost of the visioncare premiums, with the employees paying the other 50% of eachpremium. The Manager of Finance, Laura Bruce, has requested thatyou, as the Payroll Supervisor, prepare a communication for theemployees, explaining how these new benefits will impact their netpay.

(200 – 350 words)

1. If a taxpayer works for two separateemployers, how much in FUTA taxes is each employer responsible toremit in the name of the taxpayer? (Points : 1) Only the first employer isrequired to remit FUTA taxes on the wages earned from the firstjob.
Both employers must remit FUTAtaxes on the first $7,000 in wages they pay to the taxpayer.
The first employer remits 5.4%on the first $7,000 in wages while the second employer remits only.8% on the first $7,000 in wages to equal the 6.2% rate.
The first employer remits FUTAtax on the first $7,000 in wages and the second employer remitsFUTA tax on the next $7,000 in wages.

2. Sandra is single and her son Julius is 12years old. If her AGI is $79,000, what amount of child tax creditcan Sandra claim? (Points : 1)
$0.
$500.
$800.
$1,000.


3. Regarding a full or partial rollover ofassets from one retirement plan to another retirement plan: (Points: 1)
Rollovers are normally taxableto the beneficiary.
Rollovers are permitted only inunusual circumstances.
A tax-free rollover can be madefrom a traditional IRA to another traditional IRA.
A tax-free rollover can be madefrom a traditional IRA to a Roth IRA.


4. Regarding a Coverdell Education SavingsAccount: (Points : 1)
Distributions are tax-free tothe beneficiary if they are used for his or her qualified educationexpenses.
Qualified education expensesinclude required tuition, fees, books, supplies, and equipment atan eligible educational institution.
Qualified expenses must bereduced by scholarships or other tax-free income.
All of the above.


5. Kobe is a single dad with two dependentchildren, Lizzie, age 7 and Leslie, age 3. He has AGI of $51,000and paid $6,300 to a qualified day care center. What amount ofcredit can Kobe receive for the child and dependent care credit?(Points : 1)
$600.
$1,200.
$1,260.
$6,300.


6. In order to obtain and retain qualifiedstatus, a pension or profit-sharing plan must not discriminate infavor of highly compensated employees which include: (Points :1)
Employees who own more than 5%of the corporation's stock.
Employees who received over$85,000 compensation in the previous year.
Employees who were in the top25% of employees based on compensation.
None of the above.


7. DJ and Nicolette paid $1,600 in qualifyingexpenses for their daughter Nicole to attend the University ofNevada. Nicole is a sophomore. DJ and Nicolette's AGI is $95,000.What is their maximum allowable Hope credit after the creditphase-out based on AGI is taken into account? (Points : 1)
$0.
$1,400.
$1,600.
$1,650.


8. Employers with a payroll tax liability ofless than $2,500 at the end of any quarter pay their tax liability:(Points : 1)
Directly to the authorizeddepository after the end of the quarter when Form 941 isfiled.
Directly to the authorizeddepository on the same day the Form 941 is mailed.
Directly to the InternalRevenue Service when they file Form 941.
Directly only if they use theEFTPS form of payment before Form 941 is filed.


9. Joseph paid $1,750 in qualifying expensesfor his daughter who attended a community college. How much isJoseph's lifetime learning credit without regard to AGI limitationsor other credits? (Points : 1)
$250.
$350
$825.
$1,375


10. Supplemental wages are subject to thefollowing taxes: (Points : 1)
FICA taxes.
Federal withholdingtaxes.
Unemployment taxes.
All of the above.

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