dmertz
Level 15
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Retirement tax questions

It's not being taxed twice.  Your tax liability is not determined until you prepare your tax return and tax withholding from your annuity distribution is simply a down-payment on that tax liability.  The federal tax withholding from box 4 of your Form 1099-R is credited on Form 1040 line 25b.  State tax withholding is similarly credited on your state tax return.

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