Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,200 to the Roth IRA ($4,400 a year). The current value of the Roth IRA is $21,100. In the current year, Sherry withdraws $18,800 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $18,800 withdrawal will she retain after taxes to fund her car purchase? Amount of withdrawal Non-taxable amount Amount subject to tax $ Tax rate Penalty rate % Таx Penalty After tax withdrawal retained
Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,200 to the Roth IRA ($4,400 a year). The current value of the Roth IRA is $21,100. In the current year, Sherry withdraws $18,800 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $18,800 withdrawal will she retain after taxes to fund her car purchase? Amount of withdrawal Non-taxable amount Amount subject to tax $ Tax rate Penalty rate % Таx Penalty After tax withdrawal retained
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 35P
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Transcribed Image Text:Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,200 to the Roth IRA ($4,400 a
year). The current value of the Roth IRA is $21,100. In the current year, Sherry withdraws $18,800 of the account balance to purchase a
car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $18,800 withdrawal will she retain after taxes to fund her car
purchase?
Amount of withdrawal
Non-taxable amount
Amount subject to tax
$
Tax rate
%
Penalty rate
Таx
Penalty
After tax withdrawal retained
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