Problem 13-62 (LO 13-2) (Static)In 2023, Nital (age 40) contributes 10 percent of his $100,000 annual salary to a Roth 401(k) account sponsored by his employer, AYIncorporated. AY Incorporated matches employee contributions dollar-for-dollar up to 10 percent of the employee's salary. However,AY matches by contributing to the employee's traditional 401(k) account because the employer contributions are not fully vested to theemployee at the time of the contribution. Nital expects to earn a 7 percent before-tax rate of return.Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes noadditional contributions to either account. What are Nitai's after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts afterhe receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1. Table 2.)Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.esRoth 401(k)Traditional401(k)After tax proceeds from distribution

Step 1: Calculate Nital's annual contributions.His contribution: 10% * $100,000 = $10,000AY…

Answered: Problem 13-62 (LO 13-2) (Static) In…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 45P

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Required information [The following information applies to the questions displayed below.] Matthew (48 at year-end) develops cutting-edge technology for SV Inc., located in Silicon Valley. In 2021, Matthew participates in SV's money purchase pension plan (a defined contribution plan) and in his company's 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employee's salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employee's 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SV's contribution to the money purchase plan. (Leave no answers blank. Enter zero if applicable.) Assuming Matthew's annual salary is $71,000, c-1. What amount will SV contribute to Matthew's money purchase plan? c-2. What amount can Matthew contribute to his 401(k) account in 2021? Complete this question by entering your…
In 2023, Maggy (34 years old) is an employee of YBU Corporation. YBU provides a 401(k) plan for all its employees. According to the terms of the plan, YBU contributes 50 cents for every dollar the employee contributes. The maximum employer contribution under the plan is 15 percent of the employee's salary (if allowed, YBU contributes until the employee has contributed 30 percent of her salary). c. Maggy wants to maximize YBU's contribution to her 401(k) account in 2023. How much should Maggy contribute to her 401(k) account assuming her annual salary is $100,000 ( and assuming she works for YBU for the entire year)? d. Maggy wants to maximize YBU's contribution to her 401(k) account in 2023. Assume Maggy is 55 years old rather than 34 years old at the end of the year. How much should Maggy contribute to her 401(k) account assuming her annual salary is $100, 000 (and assuming she works for YBU for the entire year)?
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