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Are annuity earnings tax-free?

April 26, 2017Annuity Earnings tax-free

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Are annuity earnings tax-free?

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Annuity earnings are tax-deferred, not tax-free. Upon distribution, you will pay taxes at your current income tax rate on the interest you receive. Earnings left in the annuity, however, will continue to grow on a tax-deferred basis until withdrawn.