Angie Starts a New Job on July 1 and Becomes

question 2133

Multiple Choice

Angie starts a new job on July 1 and becomes covered under the employer's health insurance plan which has an annual deductible of $2,400. Angie contributes the maximum amount into a Health Savings Account. Which of the following statements regarding Angie's Health Savings Account is correct?

• A) Angie can contribute and deduct $1,200 for AGI.
• B) Angie's contribution will be deductible if she itemizes, and the contribution along with her out- of- pocket medical expenses exceed 7.5% of AGI.
• C) Interest income earned on the HCA is taxable.
• D) If Angie withdraws $500 to pay for X- rays, the $500 is taxable.

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Definitions:

Prototype View

A theory in cognitive science suggesting that mental categorization is based on the best or most typical example of a category.

Lexicon

A vocabulary of a language, person, or branch of knowledge, including words and expressions as well as their meanings.

Concepts

Mental representations of categories of objects, events, or ideas based on shared properties.

Categorization

The process of recognizing, differentiating, and understanding objects, concepts, or experiences by grouping them into categories based on shared characteristics.