Which of the following statements concerning the tax deductibility of nonqualified annuity premiums is correct?

Question

1. Variable annuity premiums are deductible.
2. Flexible premiums are generally deductible.
3. Single premiums are generally deductible if the premium comes from an employer's severance package.
4. Nonqualified annuity premiums are not tax-deductible.

Answer 1

The correct statement concerning the tax deductibility of nonqualified annuity premiums is:

4. Nonqualified annuity premiums are not tax-deductible.

In general, premiums paid for nonqualified annuities are made with after-tax dollars, meaning they do not provide a tax deduction when paid. The other statements regarding variable annuity premiums, flexible premiums, and single premiums have specific conditions and are not generally accurate regarding their deductibility.