Oregonians Credit Union — What amount must be withdrawn from a Traditional IRA if an IRA owner wants to walk away with $5,000 but requests 10 percent federal withholding?

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What amount must be withdrawn from a Traditional IRA if an IRA owner wants to walk away with $5,000 but requests 10 percent federal withholding?

What amount must be withdrawn from a Traditional IRA if an IRA owner wants to walk away with $5,000 but requests 10 percent federal withholding?

We may use the following formula to compute the distribution amount an IRA owner who is applying 10 percent withholding must request to receive a specific “after withholding” amount.

G=N divided by .9

G= Gross Amount Withdrawn

N= Net amount the IRA owner desires to receive after 10 percent federal withholding has been taken out (example- $5,000)

G= $5,000 divided by .9

G= $5,555.55

Note: This formula must be adjusted if a different percent is elected. If, for example, an IRA owner requests 20 percent withholding, financial institutions may use the above formula by substituting .8 for .9 (1.0-.2=.8)

What amount must be withdrawn from a Traditional IRA if an IRA owner wants to walk away with $5,000 but requests 10 percent federal withholding?

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What amount must be withdrawn from a Traditional IRA if an IRA owner wants to walk away with $5,000 but requests 10 percent federal withholding?

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