Indexed AnnuitiesIntroducing Indexed Annuities from the
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Is There an Annuity Tax?Every annuity is tax sheltered, so there is no annuity tax. The gains are not taxable during accumulation; rather they are taxable when you receive them. So, all the gains that you experience above your contributions are not taxable in your annuity. Tax is deferred until you begin to receive payments from your annuity. Consult with your financial advisor before buying an annuity as tax shelter.Once you receive payments the annuity tax is only on your gains, and at your ordinary income tax rate. If you die before your annuity matures, your beneficiary pays the annuity tax on the death benefit. In either case, the person who receives the money (the annuityholder or your beneficiary) pays the annuity tax at his or her ordinary income tax rate.
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