Annuities and Tax Reporting | USTaxAid Annuities and Tax Reporting | USTaxAid

Diane Kennedy's Blog

Annuities and Tax Reporting

Written by Diane Kennedy, CPA on March 8, 2023

You’ve probably gotten these kinds of letters, too. They don’t have forms like Form 1099 or 1098, but instead give you some balances and then ominously tell you that these numbers have been reported to the IRS.

What now?

What do you do with that information?

That’s what happened to this reader and now they wonder what they’re supposed to do with that information.

“I have three different annuities and I have never reported them because I don’t take a distribution. But this year, I got a letter from two of them stating they had reported them to the IRS. Do I need to put these on my income taxes?”

Quick Answer: No.

If you take a distribution, you will have a taxable event that will need to reported. If you inherit the annuity, you (or the executor or beneficiary) will need to report it as part of the estate tax reporting.

Otherwise, the letter for the annuity is just something for your records. It shows your current balance. Hang on to it as it will help with planning for when the annuity becomes taxable.

Leave a Comment


  • Three weekly emails with free tax updates
  • Exclusive deals on products and services
  • FREE Video: How to Write Off Practically Anything