How Is A Fixed Annuity Taxed?

  1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The gain on an annuity is taxed as ordinary income. If the annuity is held in a qualified retirement plan and premiums were previously deducted from income tax, the entire amount received is taxed as ordinary income. If the annuity is held in a Roth IRA, Roth403(b) or Roth 401(k) none of the distribution is taxed. Taxation varies according to where the annuity is held in the case of death as well.
    Answered on September 29, 2014
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