Mutual fund company offering to withhold taxes from qualified distribution for first-time home purchase - advantages?

I'm considering taking up to 10K out of a traditional IRA to help with
the down payment and closing costs on a first-time home purchase. This
is a qualified distribution for me (no 10% penalty), but evidently
counts as current gross income.

My mutual fund company offers to withhold between 10 and 100% (not
sure why the high end of the range is as high as it is) for taxes on
this distribution.

What's the advantage of the mutual fund company withholding the taxes
for me, and what's a good ballpark % to salt away for tax time,
whether the mutual fund company does the withholding for me or not?

I'd thought it was simply added to one's current gross annual income
and one would pay taxes based on one's tax bracket; e.g. 28%, 33%,
whatever. However, is it also true that social security / FICA taxes
are due as well?

If I took out 10K, and my tax bracket was 28% or 33%, what would I end
up paying?

I realize the 10K figure will be a lot less after the tax hit. One
reason I'm considering doing this at all:

-- The 10K is less than 25% of my total IRA (and I have many decades
to go to contribute back to it), so I'm not depleting the account to
do this
-- I'd like to have a year's worth of expenses (mortgage payment, etc)
as a safety net; couldn't do that fully without taking something out
from the IRA. I think I'd just sleep better at night doing so.
-- This is all in the context of wanting to put a full 20% down on my
new home purchase so that:
-- 1) I have 20% instant equity
-- 2) I won't pay PMI (and avoid doing those costly and complex
combo Arm/Fixed loans; I'm doing 30 yr fixed)

Thoughts? Ideas? Concerns?

Thanks.

.

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