Premature withdrawals from retirement plans may be subject to an extra tax (10 percent penalty). Which of the following claims about IRA distributions is correct
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Premature withdrawals from retirement plans may be subject to an extra tax (10 percent penalty). Which of the following claims about IRA distributions is correct?
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- Early withdrawals from retirement plans may be subject to an extra tax (10 percent penalty). Which of the following claims about IRA payouts is correct?EFarly distributions from retirement plans may result in additional tax (10% penalty) on the distribution. What statements are true regarding IRA distributions?the law imposes a 10% additional tax on early distributions from traditional and Roth IRAs unless an exception applies. Which of the following is not true regarding the 10% additional tax on early distributions?\\nA. Generally, early distributions are those a taxpayer receives from an IRA before reaching age 59(1)/(2)\\nB. A distribution that a taxpayer rolls over or transfers to another IRA or qualified retirement plan is not subject to this 10% additional tax\\nC. The additional 10% tax on early distributions from qualified retirement plans qualifies as a penalty for withdrawal of savings and can be deducted\\nD. The 10% additional tax applies to the part of the distribution that he or she has to include in gross incomev
- Which statement is true regarding IRA distributions? Minimum annual distribution rules apply to Roth IRAs. Distributions from a Roth IRA are taxed at the individual's marginal tax rate. Minimum annual distribution rules apply to traditional IRAs. The IRA penalty tax applies to all traditional IRA distributions before age 59.5 with no exceptions.An Individual Retirement Account (IRA) is an account in which the saver does not pay income tax on the amount deposited but is not allowed to withdraw the money until retirement. (The saver pays income tax at that point, but his or her tax bracket is much lower then.)Marlene Silva wishes to have an IRA that will be worth $100,000 when she retires at age 65. (Round your answers to the nearest cent.) (a) How much must she deposit at age 34 at 8 3/8% compounded daily? $ (b) If, at age 65, she arranges for the monthly interest to be sent to her, how much will she receive each thirty-day month?You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal? Group of answer choices $59,827 $41,879 $74,783 $36,644
- You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal?E3-15. A taxpayer is about to receive a $1,000 bonus from her employer. She would like to put this bonus into a retirement account. She has come to you for advice as to whether she should put the $1,000 into a traditional deductible IRA or a Roth IRA. You learn that she faces a current marginal tax rate of 28% and expects to face the same rate in 40 years, when she plans to withdraw the funds at age 70. She expects to earn a pretax rate of return of 10% in either retirement account by investing the funds in corporate bonds. Advise the taxpayer as to what she should do. E3-16. Assume the same facts as presented in E3-15, with the exception that the taxpayer expects her tax rate to be 20% when she retires in 40 years. What should the taxpayer do now?Which of the following is TRUE regarding qualified retirement plans? Distributions are taxable only prior to age 59½. Contributions are made with 100-percent after-tax dollars. Distributions are subject to a 10-percent penalty. Contributions are made with 100-percent pretax dollars.
- Delaying social security benefits is a good strategy for maximizing retirement income. By choosing not to begin receiving benefits at the normal retirement age of 67, a participant’s benefits will increase by ____ percent for each year of delay up to age 70. 1 6.2 8 1.45John is trying to decide whether to contribute to a Roth IRA or a traditional IRA. He plans on making a $5,000 contribution to whichever plan he decides to fund. He currently pays tax at a 32 percent marginal income tax rate, but he believes that his marginal tax rate in the future will be 28 percent. He intends to leave the money in the Roth IRA or traditional IRA for 30 years, and he expects to earn a 6 percent before-tax rate of return on the account. (Use Table 1.) Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Problem 13-78 Part b (Static) b. How much will John accumulate after taxes if he contributes to a traditional IRA (consider only the funds contributed to the traditional IRA)?a. Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in a tax-exempt IRA account. What will be the value of a one-time $13,000 investment in 5 years? 10 years? 20 years? You may use Appendix C to answer the questions. Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ 28,066 in 20 years: $ 60,592 b. Suppose the preceding 8 percent return is taxable rather than tax-deferred and the taxes are paid annually. What will be the after-tax value of her $13,000 investment after 5, 10, and 20 years? Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ in 20 years: $ 19,101