Question

Suppose you invest $15,000 at the age of 35, and agree to start receiving

payments at the age of 45. At age 41, you decide you want to withdraw $5000

from your account. What is the IRS fee you will have to pay? Remember, the

IRS charges 10% if you withdraw before you are 59.5.

A. $500.00

B. $750.00

C. $50.00

D. $250.00

Answer 1

A. $500.00

Explanation:

IRS popularly known as Internal revenue service charges an IRS fee under the authority of the Federal Law and policy agencies. This implementation of IRS fee is to recuperate the cost of rendering a service to the masses.

From the given information in the question:

Suppose you invest $15,000 at the age of 35 and agree to start receiving payments at the age of 45.

At age 41, you decide you want to withdraw $5000 from your account.

Since the investor is still 41 years of age ; IRS will charge 10% of the withdrawal amount.

IRS fee = 10% of $5000

IRS fee = 0.1 × $5000

IRS fee = $500