Investment return

[Yury1]

Good afternoon,

I have invested a sum of money 7 years ago into insurance and annuity corporation and this year I received the money back with the interest that I have earned over those years.

Please advise how and where do I show this on my tax return and what will be the taxable amount since it was accumulated over the years.

Thank you,

[K M W]

Hi, Yury1!

Generally speaking, a distribution from an annuity account would be reported to you on a Form 1099-R, and you would report any taxable amounts on your tax return on the line for "pensions and annuities" (line 5 on the 2023 Form 1040).

Even though you have earned the interest over the past seven years, as the distribution took place this year, all of the earnings will be taxable on the current year return.  Presuming your initial investment was  made with after-tax dollars, it would just be the interest/earnings that are taxable. However, if your initial investment was made with pre-tax dollars, then the entire distribution received this year will be taxable on your 2024 tax return.