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.

[fanfare]

when I said 25% I had forgotten about the new tax brackets in 2018. There is no 25% bracket. see my other comments.

[Hal_Al · Accepted solution]

Why are you doing this? Reading between the lines, it appears you want to remove it because you are in a lower tax bracket now than you expect to be in the future.

 You cannot make a withdrawal, at this time, for tax year 2017. That had to be done on or before 12-31-17. Anything you do now will count for tax year 2018. So, you may want to wait til later in the year to have a better handle on your overall tax situation.

 “I  am not withdrawing it  too early”. I take that to mean you are over age 59-1/2. If you are under age 59-1/2, you will have to pay a 10% early withdrawal penalty, in addition to the 15% tax.

 Instead of removing money and putting it into a taxable account, you could consider converting some of your traditional IRA to a Roth IRA. You pay the same amount of tax, as withdrawing the money (but no penalty for those under 59.5) but the money can be invested free of future tax. 

[fanfare]

you haven't said if you are single or married, and whether you itemize or not.
for a Single filer, to avoid the 25% bracket your AGI must stay below 37,951
 Before a $13,000 distribution that means your AGI must be lower than 24,951
Your AGI will depend on your filing status and deductions.

[Hal_Al]

The 25% bracket starts at $37,951 of Taxable income, for singles.
Taxable income = AGI (Adjusted Gross income) minus deductions and exemptions ($10,400 for most singles). So, you could have up to $48,350 of total income and still be in the 15% bracket.

[SweetieJean]

"want to transfer most of it to a savings account" A savings account does not sound like a qualified plan transfer.

[trudijane]

Yes, I'm looking at the chart.  I really would like to use this money vs. invest it right now; I'm just trying to steer clear of being taxed additionally (that is, after Fidelity taxes the amount in the IRA).

[trudijane]

As for deductions, I had a lot of medical deductions this year, but don't know how this all fits into the equation.  I could look at last year's tax return if that helps at all.

[trudijane]

Why are you doing this? Reading between the lines, it appears you want to remove it because you are in a lower tax bracket now than you expect to be in the future.

***No, because it's just sitting there and I have an enornous amount of veterinarian expenses and dental expenses which I'd like to be able to withdraw from this amount.  I would like a liquid account.

You cannot make a withdrawal, at this time, for tax year 2017. That had to be done on or before 12-31-17. Anything you do now will count for tax year 2018. So, you may want to wait til later in the year to have a better handle on your overall tax situation.

**My tax situation will remain the same.  I waited from doing it last year to this year already.

“I  am not withdrawing it too early”. I take that to mean you are over age 59-1/2. If you are under age 59-1/2, you will have to pay a 10% early withdrawal penalty, in addition to the 15% tax.

I'm 67, so no penalty.

Instead of removing money and putting it into a taxable account, you could consider converting some of your traditional IRA to a Roth IRA. You pay the same amount of tax, as withdrawing the money (but no penalty for those under 59.5) but the money can be invested free of future tax.

As I said, I want to use it for a lot of expenses.

[trudijane]

Thank you all for your useful comments.  As you can see, I will never understand taxes, although I've been doing them for  years ! with -0- refund and -0- payments.

So, one last question, given the complexity of "taxes" and the changes ... would it be safe for me to ask for 20% of the amount of my IRA and not be taxed again later?

I do have other investments, but they are not liquid, and I'd really love to get some expenses taken care of now, not later - meanwhile, it has just been sitting there and I do need it now.

Thank you.

[fanfare]

based on the new law and your low income as you stated previously, your tax bracket will be 12% so ask for 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

[fanfare]

I think you meant to say "ask for 80% of your IRA, with 20% going to IRS" You have to state your distribution amount (100%), and then specify how much you want withheld. I suggest here 15%. That leaves you with 85 % for expenses.

[trudijane]

When you say I won't be itemizing - why do you think that?  I definitely have numerous medical expenses this year to add up.  So, how do I put it? Ask Fidelity to take out 15% of the amount for taxes, or 20% of the amount for taxes.  OK, if they want a #, it is actually, $12,741.  How much should I ask them to transfer?

[fanfare]

ask for 15% to be withheld on a $13,000 distribution

[Hal_Al]

You say you have a fixed yearly income of $37,692. How much of that is social security?

[trudijane]

$17,580