Required information Kathleen, age 56, works for MH, Inc. in Dallas, Texas. Kath

Question

Required information Kathleen, age 56, works for MH, Inc. in Dallas, Texas. Kathleen contributes to a Roth 401k and MH contributes to a traditional 401k on her behalf. Kathleen has contributed $22,500 to her Roth 401k over the past six years. The current balance in her Roth 401K account is $37,500 and the balance in her traditional 401k is $26,250. 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%. d. If Kathleen retires from MH and then she receives a $3,750 distribution from her Roth 401k, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? Answer is complete but not entirely correct Net distribution 2,250

Explanation / Answer

D. If kathleen retires then receives $3750 from her roth 401l account then she will not have to pay any tax on it since tax is paid upfront on it.

E. Kathleen need not to pay any tax on it in given case.

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