Annuity

Tax on non-qualified annuity withdrawals

The taxation on annuity withdrawal works as follows:

For a non-qualified annuity, any withdrawals are considered to first come from unrealized gains.    For example, with an annuity that started with $50,000 and has grown to $70,000,  the first $20,000 of withdrawals would be taxable as ordinary income, and anything beyond the initial $20K would be considered a return of basis and therefore not taxable.  This is something to consider when deciding on a withdrawal strategy.

Schanel & Associates, PA, Certified Public Accountants, located in Jupiter, FL, provides tax, accounting, and consulting services to clients throughout Palm Beach County, including Palm Beach Gardens, West Palm Beach and Jupiter, as well as  South Florida and the United States.

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