Question

Minnie deposited $3000 into a 401(k) that grew to $6000 at her retirement. If Minnie is currently in the 10% tax bracket and is retired, how much tax will she have to pay when she withdraws the entire $6000?

a. $750
b. $300
c. $0
d. $600

Answer 1

Minnie will have to pay $600 in taxes when she withdraws the entire $6000 from her 401(k).

Step-by-step explanation:

To calculate the tax Minnie will have to pay when she withdraws the entire $6000 from her 401(k), we need to find 10% of $6000.

10% of $6000 is $600.

Therefore, Minnie will have to pay $600 in taxes when she withdraws the entire $6000.