I received an Annuity distribution from a life insurance policy. The IRS has already taken out taxes for this payment. Do I also have to pay income taxes on this?

[VolvoGirl]

They probably took out tax withholding on it. Like withholding from your paycheck.  You should get a 1099R form for it and add it to your tax return.   Then you get credit for the withholding taken out.  

[rjs]

The tax that was "taken out" (i.e. withheld) from your distribution is an advance payment towards the income tax that you have to pay on the distribution. The advance payment and the actual tax that you owe will be reconciled on your tax return. The tax on the annuity distribution is not calculated separately from your other income. The distribution will be included in the total income on your tax return, and the advance payment will be included in the total tax withheld.