Is Annuity interest taxable?

[sailorii]

We have a fixed Annuity with Auto Owners Life Ins Co.  is the annual interest taxable?

[MichaelL1]

Normally an annuity defers the income taxes from being paid and once it is taken as a distribution it is taxed. 

Did you take money out?  Did they issue you a 1098INT?

"If you buy the annuity with pretax money, then the entire balance will be taxable. If you use after-tax funds, however, then you'll be taxed only on the earnings. If you cash out a deferred annuity in a lump sum, then you'll have to pay income taxes on all of the earnings higher than your original investment."

Source: http://www.kiplinger.com/article/insurance/T003-C001-S001-how-annuities-are-taxed.html