Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes toa traditional 401(k) on her behalf. Kathleen has contributed $37,200 to her Roth 401(k) over the past six years. The currentbalance in her Roth 401(k) account is $62,000, and the balance in her traditional 401(k) is $48,000. Kathleen needs cashbecause she is taking a month of vacation to travel the world. Answer the following questions relating to distributions fromKathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent.Problem 13-61 Part c (Algo)c. If Kathleen retires from MH and then receives a $15,000 distribution from her traditional 401(k), how much will she be able to keepafter paying taxes and penalties, if any, on the distribution?Net distribution

An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or…

Answered: Kathleen, age 56, works for MH…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf. Kathleen has contributed $37,200 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $62,000, and the balance in her traditional 401(k) is $48,000. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent. Problem 13-61 Part b (Algo) b. If Kathleen receives a $15,000 distribution from her Roth 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? X Answer is complete but not entirely correct. Net distribution $ 2,040
Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf, Kathleen has contributed $43,680 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $72,800, and the balance in her traditional 401(k) is $55,200. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent. Problem 13-61 Part a (Algo) a. If Kathleen receives a $19,500 distribution from her traditional 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? Net distribution
Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf. Kathleen has contributed $37,200 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $62,000, and the balance in her traditional 401(k) is $48,000. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income 24 percent. Problem 13-61 Part e (Algo) e. Assume the original facts except that Kathleen is 60 years of age, not 56. If Kathleen receives a $15,000 distribution from her Roth 401(k) (without retiring), how much will she be able to keep after paying taxes and penalties, if any, on the distribution? Net distribution
Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf. Kathleen has contributed $37,200 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $62,000, and the balance in her traditional 401(k) is $48,000. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent. Problem 13-61 Part d (Algo) d. If Kathleen retires from MH and then receives a $15,000 distribution from her Roth 401(k), how much will she be able to keep after paying taxes and penalties, if any, on the distribution? Net distribution
Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf. Kathleen has contributed $30,000 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $50,000 and the balance in her traditional 401(k) is $40,000. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent. a. If Kathleen receives a $10,000 distribution from her traditional 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? (answer is not 6000 or 6840)
[The following information applies to the questions displayed below] Kathleen, age 56, works for MH Incorporated in Dallas, Texas. Kathleen contributes to a Roth 401(k), and MH contributes to a traditional 401(k) on her behalf. Kathleen has contributed $35,760 to her Roth 401(k) over the past six years. The current balance in her Roth 401(k) account is $59,600, and the balance in her traditional 401(k) is $46,400. Kathleen needs cash because she is taking a month of vacation to travel the world. Answer the following questions relating to distributions from Kathleen's retirement accounts assuming her marginal tax rate for ordinary income is 24 percent. Problem 13-61 Part a (Algo) a. If Kathleen receives a $14,000 distribution from her traditional 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? Net distribution
Larissa, who is age 45, has just resigned from her current job. She worked for Ace, which sponsors a cash balance plan and a standard 401(k) plan. Each of the plans uses the longest permitted vesting schedule and both plans are top heavy. Larissa has a balance of $30,000 in the cash balance plan, has deferred $20,000 into the 401(k) plan and has employer matching contributions of $12,000. If she has been employed for three years, but only participating in the plans for the last two years, how much does she keep if she leaves today? O $64,000. O $32,000. $20,000. O $54,800.
Lisa, age 45, needed some cash so she withdrew $50,000 from her Roth IRA. At the time the distribution, the balance in the Roth IRA was $200.000Lisa established the Roth IRA eight years ago. Through a conversion and annual contributions, she has contributed $20,000 to er account. What amount of the distribution is taxable and subject to early distribution penalty?
Van, who is 59, was born on 1 July 1956. He has $1,100,000 in his superannuation fund, consisting of $300,000 in non-concessional contributions. He has decided it is about time to begin receiving his superannuation benefits and wants to take a lump sum to pay off his mortgage, buy a new car and pay some debts. The amount he needs is about $430,000. Whatever remains in superannuation after payment of the lump sum he would like to commence an income stream. Advise Van on how he could receive his superannuation benefits in the most tax-effective way.
Desmond is 25 years old, and he participates in his employer's 401(k) plan. During the year, he contributed $3,000 to his 401(k) account. What is Desmond's saver's credit in each of the following alternative scenarios? (Use Exhibit 13-8) Note: Leave no answer blank. Enter zero if applicable. a. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $40,000. b. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $17,500. c. Desmond files as a head of household and has an AGI of $44,000. d. Desmond and his spouse file jointly and report an AGI of $30,000 for the year.
Desmond is 25 years old, and he participates in his employer’s 401(k) plan. During the year, he contributed $3,000 to his 401(k) account. What is Desmond’s saver’s credit in each of the following alternative scenarios? (Use Exhibit 13-8) (Leave no answer blank. Enter zero if applicable.)a. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $34,000.
Jenny, single, age 42, earns $50,000 working in 2022. She has no other income. Her medical expenses for the year total $5,000. During the year, she suffered a nonbusiness casualty loss of $7,500 when her apartment is damaged by flood waters (part of a Federally declared disaster area). Jenny contributed $10,000 to her church. She is trying to decide whether to contribute $1,000 to a traditional IRA. Fill in the table below to see if the IRA contribution reduces taxable income. Don't forget to apply the floors to the medical expenses. The deductible casualty loss has been calculated for you. We will look at personal (nonbusiness) casualty losses in another chapter; note that the nonbusiness casualty loss calculation involves 2 floors. 1. Complete the table to show the effect the IRA contribution would have on Jenny's itemized deductions. Without IRA Contribution Gross Income Contribution to IRA AGI Itemized Deductions Charitable contribution Medical expense deduction Casualty loss…

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