If he does this, how much will he owe in taxes and penalties on this distribution if he is in the 25% tax bracket?
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is $12,000. Ramit wants to withdraw $5,000 from his Roth IRA account so that he can travel
to Europe this summer. If he does this, how much will he owe in taxes and penalties on this
distribution if he is in the 25% tax bracket?
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- John 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)?Daniel knows that he can withdraw up to a maximum of $35,000 from his Registered Retirement Savings Plan (RRSP) under the Home Buyers Plan (HBP). He knows that he has to pay at least 1/15th of the amount that he borrows. Danieľ's RRSP market value is $45,680 on the day that he decides to withdraw $25,700 under the HBP for the down payment on his new home. What is the minimum annual amount that Daniel must repay to his RRSP on the amount he withdraws from the HBP? A $3,045.33 В $2,333.33 $5,000.00 D $1,713.33 E $3,433.33An individual is considering contributing $4,000 per year to either a traditional or a Roth IRA. Payments would begin in one year. If she uses the traditional IRA, her contributions would be fully deductible. She is 40-years old and is in a 28 percent tax bracket. On either IRA she can earn 7 percent. When she retires at age 65, she believes she will be in a 15 percent tax bracket. She invests not only the $4,000 per year, but any tax savings due to the deductibility of her contributions in a taxable investment earning a pretax rate of 7 percent. She will withdraw all her money upon retirement and may owe taxes then, depending on the type of IRA chosen. What is the after-tax future value of the traditional IRA including the invested tax deductions? Group of answer choices $237,545.47 $268,796.81 $215,046.73 $245,384.26 $252,996.15
- Michael turned 25 years old on March 1, 2023, and just opened a Tax-Free Savings Account (TFSA) where he deposited $6,500. Help Michael with the scenarios below. Michael is aware of the following basics regarding TFSA’s: you can withdraw any amount from your TFSA whenever you want; all withdrawals are tax-free; withdrawing from your TFSA doesn’t result in lost TFSA contribution room; withdrawals you make this year will be added to your unused contribution room the following year (i.e. withdrawing from your TFSA has no effect on your contribution room in the year that you make the withdrawal, it only affects your contribution room for the following year); you can re-contribute any funds that you have withdrawn from your TFSA back into your account starting the year after the year in which you make the withdrawal (i.e. January 1st of the following year); and you can carry forward any uncontributed amounts into future years indefinitely. If Michael’s $6,500 TFSA investment decreases…When Jamal graduated from college recently, his parents gave him $1,000 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 11 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use (Exhibit 1-A, Exhibit 1-8, Exhibit 1-C, Exhibit 1-D). Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to the nearest whole number. IRA balanceAsha feels she needs $45,000 per year in retirement. If she receives $30,000 a year from Social Security , at what interest rate must Asha invest her $25,000 of savings for her total income to be at least $45,000 per year
- David Abbot is buying a new house, and he is taking out a 30-year mortgage. David will borrow $201,000 from a bank, and to repay the loan he will make 360 monthly payments (principal and interest) of $1,158.97 per month over the next 30years. David can deduct interest payments on his mortgage from his taxable income, and based on his income, David is in the 32% tax bracket. a. What is the before-tax interest rate (per year) on David's loan? b. What is the after-tax interest rate that David is paying?When Jamal graduated from college recently, his parents gave him $1,980 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 14 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D). Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimal places. IRA balanceMatt recently deposited $41,250 in a savings account paying a guaranteed interest rate of 2.6 percent for the next 10 years. If Matt expects his marginal tax rate to be 22.00 percent for the next 10 years, how much interest will he earn after-tax for the first year of his investment? How much interest will he earn after-tax for the second year of his investment if he withdraws enough cash every year to pay the tax on the interest he earns? How much will he have in the account after 4 years? How much will he have in the account after 7 years?
- Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is $125,000. 1. What is the maximum amount that Meredith can contribute? Show your calculations using Microsoft Excel. 2. Assume that Meredith’s AGI is $100,000. She plans to put $6,000 each year into her Roth IRA, hoping to earn 6% annually. What future value will accumulate in her Roth at the end of 20 years? 3. In part (b), instead assume that Meredith puts the $6,000 into the Roth for 15 years at 6%. How much will accumulate at the end of this period?In 2020, Jack and Eri are married. Jack earns $150,000 from his job as a finance executive. Eri earns $25,000 per year as a part-time florist. They have two children, Harry and Gon, ages 2 and 5. Jack's great aunt Jean gave him a check for $17,000 during the year because he is her favorite nephew. Also, Jack's job reimbursed him $5,000 for childcare for his two sons. Eri owns a 20% interest in Flowers to Go (a partnership). The partnership earned $75,000 in operating income during the year, it also paid a cash distribution of $15,000 to Eri during the year. Jack and Eri have a joint checking account that earned interest of $165 for the year. Jack also own City of Mexico bonds which paid interest of $1,000. They also have the following expenses during the year: · Medical Expenses: $22,000 · State & Local Taxes: $11,500 · Federal Income Tax Payments: $10,000 · Cash Charitable Contributions: $3,000 The standard deduction amounts for 2021 are listed below: · Single: $12,550 · Head…Ophria invested well and plans to retire now because she has $2,300,000 in hre tax-deferred IRA account. How long will she be able to withdraw $125,000 per year (beginning one year from now) if her investments earn at a rate of 4% per year? solve using factors and NPER functions.