SIE Exam Practice Question 784

Correct Answer: B

Explanation:

The nondeductible excise tax for over-contributing to an IRA is 6%, not 10%. An employee who makes voluntary contributions to a 401(k) plan is considered an active participant. However, an employee participating in a 457 plan is not an active participant. A nonworking divorced person, age 40, who receives alimony may contribute to an IRA the lesser of the maximum contribution limit or 100% of the alimony received.