Annuity income

Forum|Forum|6 years ago
November 21, 2019
1 reply
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Can I opt to treat excludable annuity income as taxable in a year when doing so would not change my tax result?

Best answer by dmertz

No. The taxable and nontaxable portions of an annuity distribution are determined by law.

Even if you do report a higher amount as taxable than the amount reported in box 2a of the Form 1099-R from the annuity company, it will not change the fact that the legally required amount of your investment in the contract was actually distributed and will not cause more of your investment in the contract to remain in the annuity. The taxable amount of future distributions from the annuity will not be reduced by you incorrectly reporting the taxable amount. The IRS automated system might or might not detect your reporting error, but if the inappropriate increase in your AGI it doesn't somehow increase your refund associated with the tax return on which you made the error you might not hear anything about it from the IRS.

dmertzAnswer

Level 15

No. The taxable and nontaxable portions of an annuity distribution are determined by law.

illini45

Level 2

Turbo tax has my annuity reported as IRa distribution...how do I change?

BillM223

Level 15

@illini45

I hate to state the obvious, but when you entered the 1099-R for your annuity, did you click the box for IRA or did you answer the question on the next screen that the IRA box was checked?

And to be sure, was the 1099-R amount found in line 4a and 4b or was it in lines 4c and 4d (where an annuity belongs)?

Note that pension and annuities are taxed pretty much the same way, so they are lumped in together.

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