Annuity Death Benifit payouts and taxes

[rasloper]

What is the name of your state? Im in California, my mother died in Mn.

My Mother recently died she had 4 annuities, 1 with one company that that sent a check that stated some $5000+ was taxable out of my half approx. $22,000. The other three are with another company and in their instructions they state part or all of the proceeds paid from an annuity are taxable as ordinary income. They did tell me California requires them to withhold automaticly but they did not know how much. The other company did not withhold anything? Does anybody know what I might be up against. I dont want to spend too much of the money if the Government is going to take most of it. I realize everyones tax situation is different but I'm just looking for general guidelines as I know next to nothing about this process.

Thanks your your support and assistance.What is the name of your state?

 

[Betty]

First off - there are various types of annuities. (don't know types & amts.)

Normally, a portion of the annuity payout is taxable to the beneficiary. (ie interest earned on the principal is taxable)

Even if I knew the types & amounts, it would be beyond the scope of a forum to go into detail as to how to calculate the taxable amt. (Plus don't know how much is principal/how much is interest earned on principal etc.)

You might talk to a life ins. agt. (life ins. cos. offer annuities) or to a CPA.

 

[Dandy Don]

You can contact each company directly and they should be able to give you information on how much money was withheld for state and/or federal taxes and you can ask them to send you an account statement or letter with that information on it. You will also be receiving a notice of the withheld amounts at the end of the year, which you can then use for income tax purposes.