| This annuity marketing advice might allow you to | | | | Several other states tax immediate annuity |
| sell a tax deferred annuity and remove the | | | | income benefits. |
| interest instead of providing your prospect with | | | | Maine 2% |
| an immediate annuity. | | | | Nevada 3%!!!! |
| California has tax laws that require immediate | | | | South Dakota 1.25% on the first $500,000 and |
| annuity payouts to be taxed. Naturally California | | | | then a reduction |
| would be the one to figure out how to squeeze all | | | | West Virginia 1% |
| the available tax dollars. | | | | Wyoming 1%. |
| What is the tax? 2.35% of the paid benefit. The | | | | A method for avoiding the tax would be to buy |
| insurance company providing the income benefit | | | | the annuity in a different state that doesn't tax |
| will calculate the tax liability prior to providing the | | | | income benefits. (many companies allow this) |
| income to the client. The insurance company then | | | | Another option is to put your funds on deposit |
| pays the Sate directly. | | | | earning interest and remove the interest on a |
| Taxes, taxes and more taxes. | | | | monthly income. Many insurance annuity contracts |
| Makes you wonder how many state accountants | | | | also allow for 10% of the value of the annuity to |
| it took to dream up this idea. They must have | | | | be removed without penalty and many will allow |
| had help from the state assembly. (Oh by the | | | | you to do this on a monthly income basis. |
| way, they also will charge any income taxes that | | | | If you know your states tax rules you will be in a |
| are due the state!) | | | | better position to advise your client. |