AD Banker Comprehensive Practice Exam

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Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

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TSAs are tax-sheltered retirement programs for which type of organizations?

Corporations
Religious organizations
Charitable organizations
Educational institutions

The correct answer is: Corporations

Tax-Sheltered Annuities (TSAs) are specifically designed for certain types of tax-exempt organizations, which primarily include educational institutions, religious organizations, and charitable organizations. The key aspect of TSAs is that they are retirement plans allowing employees of these organizations to set aside salary on a pre-tax basis, thus deferring the tax on that income until it is withdrawn. While corporations do offer retirement plans, they typically do not utilize TSAs, as these plans are specifically designated for qualifying organizations that operate on a non-profit basis. Therefore, educational institutions, religious organizations, and charitable organizations are the main beneficiaries of TSAs, as they align with the tax-exempt status required to take advantage of such plans. The need for tax-deferral through TSAs underscores their purpose in helping employees in these specific sectors save for retirement in a tax-advantaged manner.