When does annuity get taxed?
Following tax laws to the T is something that very few people can boast of. Among the several options that are available, the deferred tax growth of an annuity account is what interests people the most. For the duration that the money lies in an IRA like account, the entire figure is not taxable. But you have to understand that at some point, taxation is going to take place.
A deferred annuity remains untaxed for the time that it is accumulating. As your interest compounds you don’t have to worry about it being tax. The taxation laws come into play in the next phase, when the money has to be distributed or paid out. Depending on your choice, this could be a lump sum payment or a fixed monthly interest rate one. < Read full article…