How much taxes to hold out when cashing in my IRA?

Question

I wanted to know how much in taxes I should have held out on my IRA that I am going to cash in? It is only about $730.00.

Answer 1

Best Answer - Chosen by Asker

It depends on your other income. The $730 is added to all your other income. If you are in the 28% tax bracket, then you will owe $204 for income taxes. Furthermore, if you are under the age of 59.5, then you will also owe a 10% Section 72 tax for the early distribution.

If you live in a state with an income tax, then you will owe state taxes. Some states have mandatory withholding on IRA distributions, but most don't.

I hope this helps.
Gary

Asker's Rating:

Asker's Comment:

thanks for the help!

Answer 2

You will have 20% automatically withheld for taxes if you are under 59.5. To be 100% safe, I would set an additional 10% aside.