Question

Tegan made fully-deductible contributions to traditional retirement accounts for several years. In 2020, she decides to withdraw $15,000 from one of her accounts. Tegan is 62 years old. How does this transaction affect her 2020 tax return

Answer 1

The transaction will affect her tax return because full $15,000 distribution is taxable income but, not subject to the early distribution penalty.

What is a Tax return?

A tax return means the process of returning tax toi taxpayer after an over-payment or mistake in computation

In U.S., there are no limit in withdrawal if the tax payer has surpassed the age of 59 although the withdrawal is taxable given the account is traditional IRA.

Hence, the transaction will affect her tax return because full $15,000 distribution is taxable income but, not subject to the early distribution penalty.

Therefore, the Option A is correct

Raed more about Tax return

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