Jacque Solis,a 38-year-old,is leaving her current job and would like to take a long vacation before a new job.She has $58,000 in a qualified plan that she would like to live on during this period.If she is in a 25 percent marginal tax bracket,how much will she have left after paying taxes and penalties?

Question

Quizplus · Accepted Answer

Since Jacque is leaving her current job and accessing her qualified plan before the age of 59 and a half, she will be subject to a 10% early withdrawal penalty in addition to income taxes on the amount withdrawn.

10% penalty on $58,000 = $5,800

Taxable amount = $58,000

If Jacque is in a 25% marginal tax bracket, she will owe:

$58,000 x 0.25 = $14,500

Total amount owed in taxes and penalties: $5,800 + $14,500 = $20,300

Therefore, the amount Jacque will have left after paying taxes and penalties is:

$58,000 - $20,300 = $37,700

So option C is the correct answer.

Jacque Solis,a 38-Year-Old,is Leaving Her Current Job and Would Like