Question

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

A. $0.
B. $10,000.
C. $25,000.
D. $35,000.
E. None of these.

Answer 1

Shauna will be required to pay a total tax of $25,000 (25% of $100,000) on her distribution.

Step-by-step explanation:

To calculate the total amount of tax and penalty Shauna will be required to pay on her $100,000 distribution from her 401(k) account, you need to determine her tax liability based on her marginal tax rate of 25%.

Since Shauna received the distribution on her 59th birthday and she has not yet retired, she will not be subject to the early withdrawal penalty of 10%.

Therefore, Shauna will be required to pay a total tax of $25,000 (25% of $100,000) on her distribution.