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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29571
Experience:  Taxes, Immigration, Labor Relations
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should I have taxes withheld on an annuity

Customer Question

Make about $80,000 per year. Beginning in April, at age 62, will start getting a small annuity monthly from a previous employer.

Annuity: $436 monthly. Should I have state and local taxes withheld?

If so, as a single woman with no dependents, how many allowances should I claim?

Thank you.
Submitted: 8 years ago.
Category: Tax
Expert:  Lev replied 8 years ago.


Assuming you do not itemize - you need to file W4 form - with your employer as single with 2 allowances and if you are paid biweekly - your paycheck should look as

Gross Pay - $3,077
Federal Withholding - $533
Social Security - $191
Medicare - $45
Washington DC - $209
Net Pay - $2,100


For annuity distribution you should file the form W4-p - with the administrator of your account as single with zero allowances and your check should look as

Monthly Gross - $436
Federal Withholding - $21
Washington DC - $3
Net Pay - $412