Question

Mandy deposited $3000 into a 401(k) that grew to $5000 by retirement. if mandy is currently in the 10% tax bracket and retired, how much tax will she have to pay in taxes when she withdraws the entire $5000?

Answer 1

Actually the current tax bracket of 10% only accounts for Mandy’s current income. Everyone has a tax bracket based on the entire income that year. However in Mandy’s case, her income will increase by $5,000 if she withdraw the entire $5,000. Therefore the tax bracket should also increase since her total income increased.

However, since no additional data is available, let us assume that the withdrawal of the entire $5,000 would not affect the current tax bracket of 10%.

Calculating for the tax to pay = 10% of $50,000

= 0.10 * $50,000

= $5,000

Therefore Mandy will pay $5,000 in tax and she will be left by $45,000.

Answer 2

the answer is 500 bucks my dude have a nice day cheaters