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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52476ee9-c360-4937-8f5a-8576cacac103%2F06be5a99-bba8-40f3-be22-178f046db4f0%2F8q3rvyu_processed.png&w=3840&q=75)
Transcribed Image Text: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
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