Financial Markets Channeling Funds Quick Check

Question

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money is deposited; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is withdrawn.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money is deposited; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is withdrawn.

A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.
A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.

A 401k is taxed when the money is withdrawn; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is deposited.
A 401k is taxed when the money is withdrawn; a Roth IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; and a traditional IRA is taxed when the money is deposited.

A 401k is taxed when the money is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn.

Answer 1

Bot GPT 4-o mini answered
13 hours ago

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A 401(k) allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.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A traditional IRA allows tax deductions when the money is deposited, and then the money is taxed when it is withdrawn.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response would be: A 401k allows tax deductions when the money is deposited and then the money is taxed when it is withdrawn; a Roth IRA is taxed when the money is deposited; and a traditional IRA is taxed when the money is withdrawn.