Testing the taxation of future annuity withdrawals
I am wanting to use TurboTax to test out the tax implications of pulling various amounts of money out of a non-qualified variable annuity after I turn 59 1/2. But, I don't know how the various boxes on the 1099 form will be filled out. 1. Gross Distribution, 2a. Taxable amount, 3. Capital gain (included in box 2a), 4. Federal income tax withheld., 7. Distribution code.
So, for example, how would these various boxes look if I were to pull out $10,000?
I'm paying about an extra 0.7% per year in fees by having my money sit in my TransAmerica variable annuity (versus low cost ETFs). That's 6.8% in fees over 10 years. Obviously the more I take out, the higher my taxes. So, I'm testing the tax implications of taking it all out over 3 years, 5 years, etc.
