An employee is 10 years from retirement and has decided to begin making $2,000 annual contributions into an IRA. The employee is currently in the 33% tax bracket but expects to be in the 15% tax bracket at retirement. Which of the following contains the better choice with the correct reasoning? The Traditional IRA is the better choice because the employee will be taxed at a lower rate on lower earnings in retirement than during employment. The Roth IRA is the better choice because the employee will be taxed at a lower rate on lower earnings during employment than in retirement. The Traditional IRA is the better choice because the employee will be taxed at a higher rate on lower earnings in retirement than during employment. The Roth IRA is the better choice because the employee will be taxed at a higher rate on lower earnings during employment than in retirement.

An employee is 10 years from retirement and has decided to begin making $2,000 annual contributions into an IRA. The employee is currently in the 33% tax bracket but expects to be in the 15% tax bracket at retirement. Which of the following contains the better choice with the correct reasoning? The Traditional IRA is the better choice because the employee will be taxed at a lower rate on lower earnings in retirement than during employment. The Roth IRA is the better choice because the employee will be taxed at a lower rate on lower earnings during employment than in retirement. The Traditional IRA is the better choice because the employee will be taxed at a higher rate on lower earnings in retirement than during employment. The Roth IRA is the better choice because the employee will be taxed at a higher rate on lower earnings during employment than in retirement.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter9: Deduct Ions: Employee And Self-employed - Related Expenses

Section: Chapter Questions

Problem 38P

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