Ryan, Age 48, Received an $8,000 Distribution from His Traditional

question 135

Essay

Ryan, age 48, received an $8,000 distribution from his traditional IRA to pay for medical expenses (above the 7.5% of AGI floor). Ryan has made only deductible contributions to the IRA and his marginal tax rate is 28 percent. What amount of taxes and early distribution penalties will Ryan be required to pay on the distribution, assuming the distribution is not a coronavirus-related distribution?

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Definitions:

Steady Pay

Consistent and regular payments made to employees, typically in the form of a fixed salary or wages.

Self-Employment

The state of working for oneself as a freelance or the owner of a business rather than for an employer.

Goods

Tangible items that are manufactured or produced for sale.

Circumstances

The specific conditions or facts affecting a situation, event, or decision at a certain time.