topic Individual Retirement Annuity Rider in Retirement tax questions

Individual Retirement Annuity Rider

gbinckley — Mon, 14 Sep 2020 01:07:29 GMT

Hello

I own an annuity that has an individual retirement annuity rider on it. It says that "It amends such annuity so that it may be issued as an Individual Retirement Annuity under Section 408 (b) of the IRS Cof of 1986....." My question is does this sound like it is an IRA and I can write my payments as a deduction on my taxes?

Re: Individual Retirement Annuity Rider

Critter-3 — Mon, 14 Sep 2020 01:43:53 GMT

No it is not and no you cannot. IRA stands for Individual Retirement ACCOUNT not annuity.

Re: Individual Retirement Annuity Rider

dmertz — Mon, 14 Sep 2020 12:28:41 GMT

"IRA" means either Individual Retirement Account or Individual Retirement Annuity.

Just because a particular annuity is capable of being an IRA, it doesn't mean that your annuity is an IRA. An Individual Retirement Annuity can only be purchased with existing IRA or other qualified retirement funds or by a new IRA contribution, subject to the usual IRA contribution limits. If you make payments are to an IRA annuity of money from a non-retirement account, they would have to be explicitly made as IRA contributions (on an IRA contribution form), would be reported to you and to the IRS on Form 5498 and, if made to a traditional IRA must be reported on your tax return.

Ask the annuity company if your annuity is an IRA.

Re: Individual Retirement Annuity Rider

Critter-3 — Mon, 14 Sep 2020 12:36:11 GMT

Ok ... to recap ... if the annuity is IN an IRA then contributions to the annuity would be deductible if the annuity is in the Traditional IRA.

Re: Individual Retirement Annuity Rider

dmertz — Mon, 14 Sep 2020 16:33:38 GMT

To be clear, the tax code establishes IRAs as being either Individual Retirement Accounts under § 408(a) and CFR § 1.408-2 or as Individual Retirement Annuities under § 408(b) and CFR § 1.408-3. But yes, you can think of an Individual Retirement Annuity as being an annuity held within an Individual Retirement Account since both are subject to essentially the same rules. Whether or not the particular annuity in question is an IRA depends on how the account was established and maintained, not by whether or not the annuity is compatible with an IRA.