Qualified Annuities are taxed as ordinary earned income. But they are only taxable upon withdrawal of funds.
A "Qualified" account means that the funds were contributed on a pre-tax basis. This can be a significant advantage when accumulating assets.
But for the IRS to allow this advantage, they require that the full amount be subject to income tax instead of capitol gains taxes.
It is also important to know that at age 70 1/2, they require you to start "Required minimum Distributions". This is a requirement that you withdraw a certain amount per year (and pay taxes on it) from age 70 1/2, for the rest of your life.
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A "Qualified" account means that the funds were contributed on a pre-tax basis. This can be a significant advantage when accumulating assets.
But for the IRS to allow this advantage, they require that the full amount be subject to income tax instead of capitol gains taxes.
It is also important to know that at age 70 1/2, they require you to start "Required minimum Distributions". This is a requirement that you withdraw a certain amount per year (and pay taxes on it) from age 70 1/2, for the rest of your life.