Individual Retirement Accounts and 401(k) Plans Make the Current U

question 222

Multiple Choice

Individual Retirement Accounts and 401(k) plans make the current U.S. tax system

• A)less like European tax systems than it otherwise would be.
• B)more like a payroll tax than it otherwise would be.
• C)more like an income tax than it otherwise would be.
• D)more like a consumption tax than it otherwise would be.

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Definitions:

CESA Contribution

Funds put into a Coverdell Education Savings Account (CESA) to finance a beneficiary's educational expenses.

AGI

Adjusted Gross Income is the gross income of an individual or entity minus specific deductions, used to calculate taxable income on U.S. federal income taxes.

SIMPLE Plan

A retirement savings plan available for small businesses and self-employed individuals, offering a simplified way to save for retirement.

Salary

A fixed regular payment, typically monthly or biweekly, made by an employer to an employee, especially a professional or white-collar worker.