Annuity taxes


Q. I’m a recent federal retiree and I’m trying to project my income for the year. Is the starting point for the taxable portion of my monthly annuity the amount before or the amount after the survivor’s benefit is deducted? From what I gather from IRS Pub 721, the deduction is a pre-tax deduction, but it lowers the tax-free portion amount of my monthly annuity. Is this correct?
A. Your taxes will be based on the amount of annuity you receive, not what you would have received if you hadn’t elected a survivor annuity.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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