Annuity

baenawalker · ‎February 1, 2020

I invested $32,763 in an annuity several years ago and cancelled it March 5,2019. I received a check for 45,356 which included interest of 12,593. 1,399 was withheld for federal taxes. I should be paying taxes on the 12,593 interest, however whe I enter it in your program it shows that I have to pay taxes on the entire amount of 45,356. That is not right. what do I do?

Robert Walker

DianeC958 · ‎February 1, 2020

You should have a tax document for the distribution, Form 1099-R.

On the 1099-R you would have the full amount of the distribution in Box 1, the taxable amount in Box 2, which would be the amount of interest, and the amount you contributed in Box 5.

If you have entered this information into TurboTax you are correct that it should only tax you on the interest amount.

Please review your entries to make sure you have accounted for all of this information.

Link to more information about Tax Form 1099-R

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dmertz · ‎February 1, 2020

However, if this was an IRA annuity, the entire amount is generally taxable. Make sure that the marking of the IRA/SEP/SIMPLE box on TurboTax's 1099-R form matches that of the Form 1099-R provided by the payer.