Variable Annuities are taxed just the same as a traditional Fixed Annuity.
If the Annuity is not in an IRA or other Qualified Plan, then any withdrawal is subject to capitol gains tax, both Federal and State. This is just on the "Gains" of the policy.
If the Annuity is in an IRA or Qualified Retirement Plan, then withdrawals are taxed as Income.
It is also important to note that any withdrawal before age 59 1/2, is subject to a 10% tax penalty. This is for IRA & non IRA Annuities.
If the Annuity is a Variable Immediate Annuity, which pays an income stream to you, then things are a bit different.
If it is an IRA then all income payments are taxed as Income.
If it is not an IRA, then it is taxed under the exclusion ration. This "excludes" a certain percentage of the income from taxes, since it is considered basis (principle).
If the Annuity is not in an IRA or other Qualified Plan, then any withdrawal is subject to capitol gains tax, both Federal and State. This is just on the "Gains" of the policy.
If the Annuity is in an IRA or Qualified Retirement Plan, then withdrawals are taxed as Income.
It is also important to note that any withdrawal before age 59 1/2, is subject to a 10% tax penalty. This is for IRA & non IRA Annuities.
If the Annuity is a Variable Immediate Annuity, which pays an income stream to you, then things are a bit different.
If it is an IRA then all income payments are taxed as Income.
If it is not an IRA, then it is taxed under the exclusion ration. This "excludes" a certain percentage of the income from taxes, since it is considered basis (principle).