Business, 31.08.2020 01:01 carlyfaith3375
Lewis is single, and he is trying to decide whether to contribute $5000 to a traditional IRA or to a Roth IRA. His taxable income is currently $94,000 per year, and he expects it to be $190,000 per year when he takes his money out of his IRA. He also expects his $5000 investment to triple in value by the time he takes his money out. Use this information and the tax table below to assist Lewis in making his decision. Assume that current tax brackets will stay the same by the time Lewis takes his money out of his IRA
Part I: If Lewis chooses a traditional IRA, how much will he pay in taxes now on the $5000?
Part II: If Lewis chooses a traditional IRA, how much will he pay in taxes when he takes the $5000 and the earnings on the $5000 out of his IRA?
Part III: If Lewis chooses a Roth IRA, how much will he pay in taxes now on the $5000?
Part IV: If Lewis chooses a Roth IRA, how much will he pay in taxes when he takes the $5000 and the earnings on the $5000 out of his IRA?
Part V: Will choosing a traditional IRA or a Roth IRA cause Lewis to pay more in taxes? How much more will Lewis pay?
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