@trudijane - if you earn $35,000 then subtract the standard deduction of $12950, leaving $22,050 of taxable income; that means you are in the 12% tax bracket. So the income value of the annuity will be taxes at 12% on the first ($40,525 - $22,050) and then any additional income will be taxed at 22% for the nexst bracket, etc.
you can look up your state tax bracket on the state's revenue website. just google it. Be sure to reduce the state's standard deduction (different than federal) before determining the tax bracket.
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sorry - I read that you earned $35k in income the first time... what is your income without the annunity? but I hope what I wrote above shows you how to figure this out.. if not, post back with your income excluding the $35k annunity income.
