I'd like to withdraw money from my IRA (about $13,000). My tax bracket is 15%. How much can I withdraw without it having a negative impact on my taxes.

[trudijane]

I have an IRA with Fidelity ($13,000).  I'd like to withdraw most of it and transfer to another account.  I am in the 15% tax bracket.

In order NOT to be additionally taxed on the amount I'm taking out, what would be your advice in how much to take out.  I am not withdrawing it  too early.  When i asked Fidelity, they suggested I ask support of a tax advisor or "Turbotax".

What is the maximum I can ask for now without being taxed additionally?

Thank you.

[xmasbaby0]

"transfer it to another account"  What kind of account are you transferring it to?  And how old are you?

[VolvoGirl]

If you want to transfer it to another IRA account tell Fidelity to do a direct transfer.  Much easier.

[Carl]

If you're transferring to another IRA, then there's no need for you to "touch" the money. If you touch it, then fedality is required to withhold taxes on the distribution. If you do a direct trustee to trustee transfer then no taxes are withheld, no 1099-R is issued, and you don't have to report anything concerning the transfer on your tax return.

[trudijane]

I'm 67 (hard to believe)..but I just want to transfer most of it to a savings account of another carrier (to take care of some expenses this year).  Fidelity told me I could withdraw the entire amount, but it would have an affect on my taxes but if they withhold taxes on the distribution (which I expected), then I should not be taxed additionally on the amount withdrawn.  When I asked them last year, they told me to look at my tax bracket and they could determine what amount could be drawn; but this time they asked me to consult with a tax advisor to make sure what amount I should withdraw.

Isn't there some sort of equation where I can figure out how much I can withdraw w/o increasing my taxes? ie. If I have $13,000, and I only asked for 15% of $13,000 - would it be safe to withdraw $11,000 as a lump sum? They said something to the effect that I could withdraw the entire amount, but it would be taxes later on.

[fanfare]

you will probably get pushed into the 25% bracket so ask for 25% to be withheld on $13,000 distribution.

[trudijane]

Maybe this will help you further.  I am single, currently 15% tax bracket (fixed yearly income of $37,692).  I don't understand what an AGI is - or if you mean itemized deductions such as medical, etc....If so, I have itemized deductions, yes.  I only pay a fraction of taxes on my Social Security Income, and with the loss of my MCC Credit this year, I will owe taxes for the first time in many year.  I do them on my own since my tax preparer passed away, otherwise I would be asking him!  So, having said that, I'm looking for a safe number that I can withdraw to use as liquid expenses

[trudijane]

PS. I know that $13,000 is too much to request; If Fidelity is required to tax this amount, how do I avoid being taxed more later.

[fanfare]

There is no way to avoid tax on what you take out. Pay now, or pay later.

[Hal_Al]

The equation is (there are 2 equations):

1. Total other reportable income* – deductions – exemptions = taxable income before IRA withdrawal
2. Top of 15% bracket ($37950 for single) – taxable income from equation 1 = amount you can withdraw at 15% rate
You can use this tool to try different scenarios: <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1">https://turbotax.intuit.com/tax-to...>

Better yet, buy the download (not online) version of TurboTax. You can do an unlimited number of test returns.

Here’s an additional caveat:  When you take out an IRA distribution,  more of your social security becomes taxable. This is because the taxability of SS is dependent on how much other income you have. So your reportable income is not a fixed amount.

[fanfare]

based on the new law and your low income your tax bracket will be 12% so ask for 12% or 15% to be withheld on a $13,000 distribution, and you will avoid tax bill at tax time. You will almost surely not be itemizing

[trudijane]

There is no way to avoid tax on what you take out. Pay now, or pay later.

(I realize that; I just don't want to pay now AND later.

[TaxGuyBill]

Usually, Hal_Al's response will give you the best result:  Just enter into TurboTax and you will see the results.

Unfortunately, due to the changes in tax law for 2018, that isn't going to give you a very accurate result.

[trudijane]

Fanfare: you will probably get pushed into the 25% bracket so ask for 25% to be withheld on $13,000 distribution.
***OK, I think this is what I was kind of getting at in an indirect way.  This answer helps  me. 20-25%.

[Hal_Al]

Good point Bill. Unlike previous years, using this year's TT to estimate next year is going to be pretty worthless. I suspect it will be a while before taxcaster is updated too.