How Is A Fixed Annuity Taxed?

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September 29, 2014

David Pipes

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.

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