On March 30, 2020 Rodger (Age 56)was Laid Off from His

Essay

On March 30, 2020 Rodger (age 56)was laid off from his employer of 30 years due to rough economic times from the coronavirus. During his 30 years of employment, Rodger contributed $300,000 to his traditional 401(k)account. When Rodger was let go, his 401(k)account balance was $900,000 (this included both employer matching and account earnings). Rodger immediately withdrew $40,000 to use as an emergency savings fund. What amount of tax and early distribution penalties must Rodger pay on the $40,000 withdrawal if his ordinary marginal tax rate is 28 percent?