FAQs

Question: How can I enter Non-Qualified Annuities from an Insurance Company?

Answer: There are two aspects to annuities, the income aspect and the asset aspect.

You can deal with each separately.

Income Aspect

You can reflect anticiated annuity income by entering it as a write-in line on Client Info > Income & Expense > Wage-Like Income.

Specify the year the annuity will start paying as the "Start Year." (On "more info," you may override the amount in the first year if it is a partial year.)

Typically, part of the income is taxable and part is not taxable.

If this is the case, you would make two entries, one for the taxable income stream, and another for the non-taxable income stream.

For the non-taxable income stream, you would "X" the box next to the dollar amount labeled "Non tax."

Asset Aspect

You may also indicate that the annuity has a cash value by entering the value of the annuity as a Cash & Investment.

If the value will not be appreciating leave the appreciation column blank. Also, in the income column, specify there is no interest, dividend, or cash flow.

You may even indicate that the value will be depreciating, by entering a negative rate of appreciation.

If, however, you anticipate that the annuity will be appreciating, and that the appreciation will be distributed as ordinary income, then entering the Annuity as an IRA/401k would best capture the appreciation and tax situation.