I've had a variable annuity for about 30 years. I started a SEPP withdrawal program about 10 years ago. These payments have been coded as...
1 - Early distribution (except Roth)
D - Annuity payments from non-qualified annuities
Now that I've turned 59 1/2 will the insurance company continue to code these withdrawals as 'early distributions' or will they now become coded as 7 - 'Normal Distribution'? If not, I was thinking about ending these SEPP withdrawals and just taking out withdrawals manually as I please -- That's IF there's a tax savings by taking out 'normal' distributions versus 'early' distributions.
One more question. My home burnt down in the Palisades fire. I heard that I maybe get some sort of tax break on annuity withdrawals? Would that mean NO ordinary income tax on withdrawals? I would clear out ALL of the money from this annuity if that were the case!
Amount distributed to you after you reached age 59½ should be coded with 7D instead of 1D.
Because the SEPP plan was in place for more than 5 years when you reached ag 59½, any distributions that you receive after having reached age 59½ and are no longer a distributions for which you would need to claim the SEPP exception to the early-distribution penalty.
Treatment of distributions as qualified disaster distributions is only available for distributions from qualified retirement account, not from nonqualified annuities. Since you are over age 59½, the only benefits to treating a distribution from a qualified retirement account as a disaster distribution are that the taxable income can be spread over 3 years and you have 3 years to repay the distribution should you choose to do so. It does not make taxable income be nontaxable.
Amount distributed to you after you reached age 59½ should be coded with 7D instead of 1D.
Because the SEPP plan was in place for more than 5 years when you reached ag 59½, any distributions that you receive after having reached age 59½ and are no longer a distributions for which you would need to claim the SEPP exception to the early-distribution penalty.
Treatment of distributions as qualified disaster distributions is only available for distributions from qualified retirement account, not from nonqualified annuities. Since you are over age 59½, the only benefits to treating a distribution from a qualified retirement account as a disaster distribution are that the taxable income can be spread over 3 years and you have 3 years to repay the distribution should you choose to do so. It does not make taxable income be nontaxable.