How much tax would I owe to the IRS for IRA distribution at age 60?

So I just turned 60 last month and I'm looking at taking some money out of my IRAs. I know I'm past the age where I'd get hit with that nasty 10% early withdrawal penalty (thank goodness), but now I'm trying to figure out the actual tax damage. I've got about $340k spread across a couple different traditional IRAs, and I'm thinking of pulling out maybe $45k to help my daughter with a down payment on her first house. I'm still working part-time making around $38k a year. I'm honestly confused about how to calculate what I'll owe the IRS on this distribution. Will it just be taxed at my normal income tax rate? Does it push me into a higher tax bracket? Any suggestions on figuring this out before I pull the trigger would be super helpful. I really don't want any surprises when I file next year.

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19 comments

CyberSiren

•8M

The IRA distribution will be added to your regular income and taxed at your normal income tax rates. So if you take $45k from your IRA, that amount gets stacked on top of your $38k employment income, pushing your total taxable income to $83k (minus any deductions and credits you qualify for). This could definitely push you into a higher tax bracket for at least part of that distribution. The tax system is progressive, meaning different portions of your income are taxed at different rates. For 2025, if you're filing single, income between $44,726 and $95,375 is taxed at 22%. Before taking the distribution, consider running some numbers using tax software or the IRS withholding calculator. You might also want to think about taking smaller distributions over multiple years to potentially keep yourself in a lower bracket overall.

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CyberSiren

•8M

Yes, that's an excellent point. Large IRA distributions can indeed impact your Medicare premiums through Income-Related Monthly Adjustment Amount (IRMAA) surcharges. These are based on your income from 2 years prior, so a large distribution in 2025 could increase your 2027 Medicare premiums. For most people, the standard Medicare Part B premium is the baseline, but if your modified adjusted gross income exceeds certain thresholds, you'll pay higher premiums. Splitting the distribution across multiple tax years could help manage this impact if you're concerned about IRMAA surcharges.

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Zainab Yusuf

•8M

I went through something similar last year when I needed to pull money from my IRA for home renovations. Tax calculations had me completely confused until I found this AI tool called taxr.ai (https://taxr.ai) that helped me figure out exactly what I'd owe. You just upload your documents or enter your income details, and it shows you your tax liability with different withdrawal scenarios. I was able to play around with different distribution amounts to see how they would affect my tax bracket and total tax bill. Really helped me decide on the right amount to withdraw to minimize the tax hit.

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Zainab Yusuf

•8M

It does handle state taxes for most states including California. You can select your state and it factors in both federal and state tax implications of your IRA withdrawal. This was super helpful since different states treat retirement distributions differently. The calculations were surprisingly accurate. I was within about $120 of what the tool predicted when I filed my actual return. It accounted for how the distribution affected my tax brackets and even flagged a potential impact on some credits I was eligible for that I hadn't considered.

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Keisha Taylor

•8M

If you're planning to call the IRS to ask about your specific situation, good luck getting through! I spent HOURS on hold trying to get answers about my IRA distribution last year. Finally discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in line and call you when they get an agent. Saved me from listening to that awful hold music for hours. The agent I spoke with walked me through exactly how my distribution would be taxed and what withholding percentage I should request.

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Keisha Taylor

•8M

The service works by using automated technology to wait on hold for you. When you sign up, they start the call to the IRS and navigate the phone tree, then wait on hold in your place. When they reach a real person, they call you and connect you to the agent. It's basically like having someone else sit on hold for you. I was skeptical at first too! But this was in February, which isn't peak season. The 15 minutes was my wait time after they called me back - they had been on hold for about an hour before that. During peak season it might take longer, but you're still not the one waiting on hold. The IRS doesn't know the difference - they're still handling the same number of calls, but you get your time back.

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Paolo Marino

•8M

OK I need to publicly eat my words. After dismissing that Claimyr thing, my curiosity got the better of me and I tried it when I needed to ask about a rollover issue with my 401k to IRA transfer. It actually worked exactly as described. They called me back in about 40 minutes (said they were on hold for 1 hour 20 mins total), and I got connected to an IRS agent who answered all my questions. Saved me a massive headache and I got the info I needed to avoid a tax mistake. Sometimes being wrong feels pretty good.

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Amina Bah

•8M

If you're planning to roll part of the distribution back within 60 days, the withholding creates a complication. Any amount withheld for taxes is still considered distributed and can't be rolled back. For example, if you take $45k with 25% withheld, you'll only receive $33,750, but the full $45k is considered distributed. If you want to roll back, say, $20k of your original distribution, you'd need to come up with the full $20k from other sources since the withheld amount has already gone to the IRS. You'd eventually get credit for any overwithholding when you file your tax return, but you can't get that money back for the rollover itself.

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Effie Alexander

•24d

One thing I haven't seen mentioned yet is the timing of your withdrawal within the tax year. Since you're considering this for your daughter's house down payment, you might want to coordinate the timing with her closing date. If you can delay the distribution until early 2026, you'd defer the tax impact by a full year, which could give you more time to plan and potentially make estimated quarterly payments to avoid underpayment penalties. On the flip side, if tax rates change or your income situation shifts next year, taking it in 2025 might be better. Also, have you considered if your daughter might qualify for any first-time homebuyer programs that could reduce how much she needs for the down payment? Some state and local programs offer assistance that could let you take a smaller distribution and reduce your tax hit.

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