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Brooklyn has been contributing to a traditional IRA for seven years (all deductible contributions) and has...

Brooklyn has been contributing to a traditional IRA for seven years (all deductible contributions) and has a total of $30,000 in the account. In 2019, she is 39 years old and has decided that she wants to get a new car. She withdraws $20,000 from the IRA to help pay for the car. She is currently in the 24 percent marginal tax bracket. What amount of the withdrawal, after tax considerations, will Brooklyn have available to purchase the car?
After tax amount of the withdrawal $________

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Answer #1

Solution:

Answer is $13,200

Explanation:

Withdrawal $ 20,000
Less:10% Penality as per IRS foe early withdrawal $ -2,000
Less:24% Tax on 20,000 $ -4,800
After Tax Withdrawal $ 13,200
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