All of the Following Are Drawbacks of Profit-Sharing Plans EXCEPT

question 19

Multiple Choice

All of the following are drawbacks of profit-sharing plans EXCEPT

• A) profits of the organization are not entirely under employees' control.
• B) they are not self-funding.
• C) employees' rewards usually come a long time after their improved performance.
• D) management may resist disclosing financial and profit information.

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Definitions:

Tax Return

The form filed with a tax authority that reports income, expenses, and other pertinent tax information. Taxes payable or refundable are also determined through this document.

Relationship Test

A criterion used in tax law to determine eligibility for dependent-related deductions and credits, based on the taxpayer's relationship to the dependent.

Member of Household Test

A criteria used to determine if someone is a qualifying relative for tax purposes, considering factors like relationship, income, and support.

Qualifying Relatives

Individuals who meet certain IRS criteria allowing a taxpayer to claim them as dependents for tax purposes, potentially reducing taxable income.