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Some of the proceeds from the annuity will most likely be taxable. If you need to have taxes withheld or not depends on your individual situation: your other, filing status, amount of taxable annuities, other taxes withheld and such. There are couple of things you can do:
If you are expected to be in a lower tax bracket (10 - 15%), 10% withholding should take care of the tax liability.
If you are in higher tax bracket (20 - 25%) I would suggest 20% withholding. If you overpay, you will get the difference back when you file your taxes.
If the taxable annuity is very small or most of your other income is not taxable (like SSI or SSDI) you can just pay the balance when you file your taxes.
Another option is to estimate your tax liability in November or December and if it looks like that you are going to owe, you can make an estimated payment at the end of the year.
Answer to your questions is not simple yes or no.
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