an employee in the 22% tax bracket invests $1500.00 in a roth ira. when the employee retires, her salary is…

an employee in the 22% tax bracket invests $1500.00 in a roth ira. when the employee retires, her salary is still in the 22% tax bracket. what tax will be assessed on the initial investment when the employee opens the account? $33.00 $330.00 since the employee is using a roth ira, she will pay no taxes when she opens the account. not enough information to answer

an employee in the 22% tax bracket invests $1500.00 in a roth ira. when the employee retires, her salary is still in the 22% tax bracket. what tax will be assessed on the initial investment when the employee opens the account? $33.00 $330.00 since the employee is using a roth ira, she will pay no taxes when she opens the account. not enough information to answer

Answer

Brief Explanations:

A Roth IRA (Individual Retirement Account) is funded with after - tax dollars. This means that when contributions are made to a Roth IRA, taxes have already been paid on the money. When the account is opened (and funds are withdrawn, in this case referring to the initial investment), since the money was already taxed at the time of contribution, no additional taxes are assessed on the initial investment.

Answer:

Since the employee is using a Roth IRA, she will pay no taxes when she opens the account.