Because variable annuities are tax deferred, you don't report any earnings on your Form 1040. This is not the case with taxable investments.

For example, each year mutual funds generally must distribute all dividends, short-term gains and long-term capital gains realized by the fund through its investment activities.  When you invest in taxable mutual funds, each year you receive a Form 1099 indicating your earnings which must be reported on your tax return. With a variable annuity, on the other hand, your earnings are not taxed while you are saving for retirement, you receive no 1099s, and there are no calculations to perform.

So, you can see, variable annuities can simplify your life at tax time.