You shouldn’t have to incur any taxable events funding an annuity. If you have cash in savings, there will be no tax issues. If you are transferring funds from a qualified plan such as a 401(k) or IRA, then you avoid taxation of those funds by transferring through a 1035 Exchange. This is an IRS process rule that enables the funds to move directly to the annuity account without penalty or taxation. Your Annuity Master agent will guide you through this process.