A Mess of things since Husband passed away.

[jjf2008]

My husband passed away on 12/15/2019.  I (@84yrs) cashed $60K annuity, $54K went into local bank @ 0.01% interest, Uncle Sam will get $6K.  Can it be reversed so less taxes are paid?  How and where do I show this on my tax return?  Any help is welcomed and valued.

Yours,

Florence

[VictoriaD75]

Did you take the withdrawal of the annuity in 2019 or 2020? If you did not take it until 2020, this will not be reported on your taxes until next year. However, if you made the withdrawal in 2019, you should have received a 1099-R from the financial institution. This document will report the withdrawal and should be entered as shown on your tax return. You cannot reverse the transaction.

To enter your 1099-R, follow these steps:

• Under the Federal menu, choose Wages & Income
• Expand the menu for Retirement Plans and Social Security
• Click Start/Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R)
• Answer Yes to Did you receive any 1099-R forms?. Click Continue
• You may either import the form or choose I'll type it in myself 
• Choose Form 1099-R, withdrawal of money from 401(k) retirement plans, pensions, IRAs, etc.
• Enter the information exactly as it matches the 1099-R on the screen that follows, including distribution code in box 7
• If the code is 4-Death in box 7, the software will recognize it as inherited income
• After selecting the age of the original owner of the annuity, you will be asked if it was an RMD. Answer No. 
• Continue entering the information on the screens that follow

[jjf2008]

Dear VictoriaD75:

Thank you so very much for the help.  Truly you are very smart, and know the US Tax Laws and Procedures.

No, I took the Annuity this year (2020).  I now wish that I had left it alone because it seems that I am paying Uncle Sam $6,000 so I can have the the remainder of $60,00 sit in a local bank earning 0.01% (or some ridiculous low amount).  Victoria, Have I lost my $6,000 because I cashed in the Annuity less than two months ago?  Is there anything that I can do to recover my monies?

Again, Victoria, thank you for the help earlier.  You are one smart woman.  I hope you can help me again.  I look forward to hearing from you soon.

Sincerely yours,

Florence