The trustee is not required to withhold tax, but if they don't, you are required to make estimated payments. The IRS will, by default, assume that your tax is due in 4 quarterly installments (April 15, June 15, Sept 15 and Jan a15, 2024) and if you are underpaid, you can be assessed a penalty even if you pay in full when you file. You can avoid the penalty by using form 2210. Here is a recent example I wrote for someone selling a house that illustrates the situation.
Also beware, if you have a lump sum of income, you need to pay estimated taxes and you probably need to include form 2210 with your tax return. Suppose you sell the home on August 15 and have a gain of $100,000. The tax (depending on your other income) will be $15,000 or $20,000. The IRS default position is that income is earned evenly over the year, meaning that you owed a payment of $3750 by April 15, $3750 by June 15, $3750 by September 15, and $3750 by January 15, 2024. Even if you pay the entire estimated tax when you sell the home, those amounts from April and June will be deemed overdue and subject to a penalty plus interest. You can avoid this by including form 2210 with your tax return (calculating estimated penalties) and using the Annualized Income method, which is a way of showing the IRS that your income was uneven during the year, and that you paid the required amount due for each quarter.
In your case, a $35K IRA distribution could be taxed anywhere from 10% to 36% depending on your other income. For most people who would consider themselves "middle class", it would be 22%, but that also depends on taxability of social security and your other income.
For a distribution taken before May 31, the estimated payment is overdue, make a payment as soon as possible. For a distribution taken between June 1 and August 31, the estimated payment is due September 15.
Then, when you file your return, use form 2210 and the AI method (annualized income method) to show the IRS that your payments were made in the quarter when you had the increased income, and that should take care of any penalties.
