If I withdrew IRA at age 59 1/2 years old, do I pay taxes? Do I pay penalty?

[SteamTrain]

Make sure it's AFTER 59.5, and no extra penalty.

But....Yes, it adds to taxable income and subject to regular income taxes at whatever rate is being applied to ALL your income.....including that distribution.

[DanaB27]

It depends what kind of IRA. 

If the distribution is from a traditional IRA then it is taxable income unless you had a basis (reported on Form 8606, then some of the distribution can be nontaxable).

If the distribution is from a Roth IRA and you had the IRA for 5 years then this is a Qualified Distribution and therefore tax-free.

In both cases you will not have to pay the 10% penalty if you are 59 1/2 or older.