My wife and I are 70 and collecting Social Security. I also have a small annual income. We have two IRA's that I would like to take in a lump sum rather than payments .
My question: since our annual income plus the IRA's total is under the Federal tax table minimum, would we still have to pay tax on the IRA's no matter what?

My wife and I are 70 and collecting Social Security. I also have a small annual income. We have two IRA's that I would like to take in a lump sum rather than payments .
My question: since our annual income plus the IRA's total is under the Federal tax table minimum, would we still have to pay tax on the IRA's no matter what?

Exactly HOW MUCH is the IRA total lump sum distribution?

$4,600

Tell me what your social security and your other small income will be for 2013 will be and I will tell you if you will have any tax liability.

$39,000

You DEFINITELY will have some tax liability, as your combined income exceeds the threshold that causes your Social Security to be subject to taxation.

Thank you very much.

Glad to help.

If you break down how much is Social Security,and how much is other income, I can estimate how much tax you owe.

SS = $30,000 None of our SS is taxable according to the worksheet
OTHER = 9,900 with taxable interest

If all of your $9,000 is INTEREST income, then I stand corrected. You will have ZERO tax liability even if you take the full $4,600 lump sum distribution from your IRA.

$9,000 is from part time employment. $900 is interest income.

Makes no difference; you still have a ZERO tax liability.

Thank you very much, you have made my year.
Syd C.

Glad to help!