Taxes on life insurance benefit? |
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RandRmoney
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Taxes on life insurance benefit? |
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I am a 40 year old man on social security disability. I was the beneficiary on my father's life insurance policy. Do I have to pay taxes on it?
Tried to do a search but some funky error came up.
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Sun Mar 06, 2011 4:34 pm |
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oldguy
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No - it's tax free.
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Sun Mar 06, 2011 5:35 pm |
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RichS
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I agree with oldguy. Life insurance proceeds received by a beneficiary on a life insurance policy are tax free...it is greatest benefit of an insurance policy because you get to keep ALL of the money so you can protect your life style.
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Thu Mar 10, 2011 9:33 pm |
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sethm
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If you mean the death benefits of the insurance policy, then these funds are generally free from income tax to your named beneficiary or beneficiaries. Moreover, you may elect to have the insurance company hold on to these proceeds after your death and distribute them to your beneficiary at a later date or in a series of installments.
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Tue May 15, 2012 4:40 pm |
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Boso
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I do not agree...
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Sat May 19, 2012 8:03 am |
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annieyy
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free??
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Mon May 21, 2012 9:40 am |
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debedwards
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If it's a death benefit of an insurance policy then it is tax free. But there are cases that one should still pay for tax and that's when the policyholder transfer the ownership of life insurance policy to another party before death for monetary value or other consideration, the proceeds paid to the beneficiary at your death could be considered taxable income to that beneficiary. The help of a tax professional is needed here since this is a complicated matter.
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Sat Jul 07, 2012 1:07 am |
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resources
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No |
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Normally, at least on the state of Florida, your money can't be touched. There is no taxes that you have to pay.
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Tue Jul 10, 2012 6:18 pm |
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online cpa
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Its the same in California for my tax clients as it is for Federal. Usually there are some differences but they agree on this point.
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Fri Jul 27, 2012 2:09 am |
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viditagarwal
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A Relevant Life Policy is a very tax efficient way of ensuring that a persons are financially secure should the worst happen. Generally, a life insurance payout to your dependents won’t be taxed and can be paid as either a lump sum or income stream. Here you can read the guide about life insurance and taxes:
Taxes on life insurance
Life Insurance for Employees and it’s Tax Benefits
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Tue May 22, 2018 9:32 am |
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vaduvala
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Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.Beneficiaries generally don't have to pay income tax on money or other property they inherit, with the common exception of money withdrawn from an inherited retirement account (IRA or 401(k) plan). The good news for people who inherit money or other property is that they usually don't have to pay income tax on it.
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Wed Dec 15, 2021 4:06 pm |
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