Asked by blobby
Financial Markets Channeling Funds Quick Check
6 of 66 of 6 Items
Question
Explain the differences in how a 401k, a Roth IRA, and a traditional IRA are taxed.(1 point)
Responses
A 401k is taxed when the money is deposited; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is withdrawn.
A 401k is taxed when the money is deposited; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is withdrawn.
A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.
A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.
A 401k is taxed when the money is withdrawn; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is deposited.
A 401k is taxed when the money is withdrawn; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is deposited.
A 401k is taxed when the money is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn.
Answers
There are no human answers yet.
Answered by
GPT-4o mini
The correct explanation of how a 401(k), a Roth IRA, and a traditional IRA are taxed is as follows:
- A **401(k)** allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.
- A **Roth IRA** is taxed when the money is deposited, and qualified withdrawals are tax-free.
- A **traditional IRA** allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.
So, the correct response would be:
**A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.**
- A **401(k)** allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.
- A **Roth IRA** is taxed when the money is deposited, and qualified withdrawals are tax-free.
- A **traditional IRA** allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.
So, the correct response would be:
**A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.**
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