Chatham mae is single age 35 and wants to make a, Ask an Expert

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Chatham Mae is single, age 35, and wants to make a contribution to an IRA for the year ended December 31, 2013. She is an active participant in a qualified retirement plan sponsored by her employer. Her AGI for 2013 is $118000 before considering any IRA contribution.

A. What type of IRA, if any, is Chatham MAe eligible to make a contribution to for 2013? IF she is eligible to contribute to an IRA< what is the maximum amount that she can contribute to the IRA?

B. Assume Chatham MAe contributes a total of $12000 over six years to a ROTH IRA> in 2019, she withdraws $15000 to pay off her car loan. Her financial advisors suggested she withdraw money from the the IRA for two major reasons:1) To eliminate her debt and 2) no tax would be due on distributions from a Roth IRA after five years. Chatham Mae wants to verify the accuracy of her advisor's advice. What would be the tax consequences of this withdrawl? Alternatively, what if Chatham Mae withdrew the $15000 to purchase a house?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9972003

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