tax on annuity

Forum|Forum|1 year ago
April 3, 2025
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I received my first annual annuity payment of $5,000 in 2024, which will continue until I pass away, with the remaining funds going to my descendants. The total cost of the annuity is $50,000, plus a $2,000 premium enhancement and a 7% charge.

According to IRS rules, my first payment may be a fraction of the payment period, which is multiplied by my exclusion percentage to determine the tax-free portion. I found that my taxable amount is $2,045.45.

On my 1099-R form, both the gross distribution and the taxable amount are $5,000. Where can I enter the corrected taxable amount of $2,045.45 in TurboTax? Thank you!

DaveF1006

It depends on the type of annuity payment it is and how you enter this into the program. If it is an annuity payment for civil Service, you would enter this as a CSA-1099R. When you enter the 1099R, leave Box 2A blank.

Now there'll be a series a questions asked that follow the entry of the 1099R:

It'll ask for the payment start year.
Then it'll ask for the taxable amount. Mention that the taxable amount is different.
When it asks about the taxable amount, select the simplified method.
Next there will be a screen where you will enter information that will determine the taxable amount of your annuity.