1099R

Forum|Forum|5 years ago
July 1, 2020
1 reply
6 views

In Oct 2019 we cashed in an annuity (total withdrawal) to purchase a smaller home. I expected taxes but wasn't expecting the taxes to be so outrageous. I am floored to say the least. We are both on disability and have not paid taxes in 10 years however for 2019 we must pay taxes on annuity taxable amount PLUS 85% of our disability checks. Is this correct? Thanks for your help.

DoninGA

Level 15

Up to 85% of Social Security Retirement/Disability/Survivors benefits becomes taxable when all your other income plus 1/2 your social security reaches:

Married Filing Jointly - $32,000
Single or Head of Household - $25,000
Married Filing Separately - 0

Critter-3

Level 15

Sad you did not ask the proper questions before you made the distribution so you could have structured the payout better to reduce or eliminate the tax bill ... but as already stated it cannot be undone. If you are under the age of 59 1/2 AND are retired on disability THEN the 10% early withdrawal penalty MAY be removed using the form 5329 code 3 (if one was applied) ... follow the program interview carefully.