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.

The amount of additional tax paid for each new dollar of income received is known as the marginal tax rate. Total taxes paid divided by total income earned is the average tax rate. With a marginal tax rate of 10%, tax would be deducted from the following dollar of income at a rate of 10%.

Because your "marginal" income is what is taxed at the next highest tax bracket as you move up in tax brackets, this tax rate is known as the marginal tax rate. The actual taxes owed (as determined by the tax statements) are divided by the business's reported pre-tax income to determine the effective tax rate.

Given,

A) $6200 (10000*.72)-1000

B)8480

C)$7200 (10000*.72)

D)$8880 (remove 10% penalty from problem b)

The complete question is : Kathleen, age 56, works for MH, Inc., 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 28 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?

b. If Kathleen receives a $10,000 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?

c. If Kathleen retires from MH and then she receives a $10,000 distribution from her traditional 401(k), how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

d. If Kathleen retires from MH and then she receives a $10,000 distribution from her Roth 401(k), how much will she be able to keep after paying taxes and penalties, if any, on the distribution?

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