Chapter 18. Annuities and income taxes
“The hardest thing in the world to understand is the income tax.” | ||
| --Albert Einstein | ||
One of the most confusing aspects of annuities is the income tax aspect of the investment. On one hand, proponents of annuities see the glass as half full and will tout the fact that annuities allow you to defer taxes for many years on the gains that you achieve through your annuity investment. Putting off paying income taxes until tomorrow or even the day after many tomorrows is very attractive to people who generally have a hate-hate relationship with the IRS.
However, people critical of annuities for income tax reasons will cite that when you do start paying income taxes on the money you receive from your annuity, the tax ...
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