I received a 1099-R for an annuity contract. The annuity premium was funded from a Traditional IRA that I funded with after-tax dollars.
The insurance company only knows that the annuity was funded from a qualified IRA account. From their viewpoint, the entire amount of the annual annuity payment is taxable. Based on my documentation, my annuity premium included 15 percent of after-tax dollars.
If I manually enter 15% of the Taxable amount in Box 5, TurboTax will not reduce the taxable amount of the annual annuity payment. In addition, if I manually reduce the Taxable Amount by 15% in Box 2a, my tax liability in TurboTax does not change. BTW - Box 2b is checked - "Taxable amount not determined".
I would like to avoid paying double taxes on the 15% portion of my annuity payment that was funded with after tax dollars. Any suggestions or ideas are welcome. Thank you.
