Tax withholding is the percentage of income tax that you elect to have withheld from your IRA distribution and sent directly to the IRS in an effort to mitigate your future tax liability.
The amount you withhold, if any, may differ from your ultimate tax liability. If your withholding ends up being too much, you will be due a refund when you file your tax return. If your withholding ends up being too little, you will owe an additional amount to the government when you file your tax return.
When you initiate a distribution from your IRA, you will automatically be prompted to choose a federal tax withholding amount. All customers will be defaulted to 10% withholding, but can select 0% or any other value between 10% and 100%.