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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13127
Experience:  15years with H & R Block. Divisional leader, Instructor
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If I had money in an annuity and withdrew it after the 7

Customer Question

If I had money in an annuity and withdrew it after the 7 years, but prior to being 59 1/ can I avoid the tax penalty? Can I take the money I made in interest and put it into a ROTH IRA to avoid the tax? I am disabled, so I am not sure if I can avoid all the taxes. The money I put in the annuity was from a life insurance policy.
Submitted: 4 months ago.
Category: Tax
Expert:  Robin D. replied 4 months ago.


The penalty would be avoided if you can meet an exception. When you make a withdrawal from an annuity, the IRS assumes that earnings are withdrawn first. The 10 percent penalty applies to the earnings portion of a withdrawal.

One exception is for medical bills. The amount of unreimbursed medical expenses (>7.5% AGI; , 10% if under age 65) can mean no 10% penalty at least on that portion of the earnings withdrawn.

You cannot move it to a ROTH to avoid tax unfortunately.

Customer: replied 4 months ago.
Please do not charge my account the $33.00. I see the charge is already pending! The site said I would have a chance to approve it. I did not approve it. This is just another scam!!!