I am getting a life insurance policy pay out. Does anyone know how much taxes will be taken out?
2007-03-23 07:00:06 · 0 answers · asked by Stephen F 2 in Business & Finance ➔ Taxes ➔ United States
There is no way to tell how much tax is due. Payments to beneficiaries are tax-free. If you are not a beneficiary but are cashing in your policy, the taxable amount will include any earnings.
The premiums you paid in will not be taxed, assuming you paid those premiums with after-tax dollars. Dividends on the insurance premiums that were left with the insurance company will not be taxed. Only the earnings on the dividends will be taxed as ordinary income.
The 1099R issued to you by the insurance company will show the taxable amount in Box 2.
2007-03-23 07:29:26 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
It is usually tax-free, but part of it may be taxed if the policy earned more than the face value, such as by adding dividends. You would have to contact the life insurance company to find out for sure.
2007-03-23 07:08:45 · answer #2 · answered by taxman 2 · 0⤊ 2⤋
If someone died and you are the benificiary, there is no tax due.
If it was a policy on your life and you are cashing it in for the surrender value, you would be taxed on any amount greater than the premiums you paid.
2007-03-23 07:10:04 · answer #3 · answered by r_kav 4 · 2⤊ 0⤋
Life insurance benefits are tax-free. It is all yours.
I hope you have life insurance.
2007-03-23 07:03:40 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Nothing. Life insurance is specifically excludable from taxable income for the recipeint.
2007-03-23 07:04:36 · answer #5 · answered by Molly 6 · 1⤊ 0⤋
None and/or None.
Proceeds from life insurance policies are non-taxable. Period.
2007-03-23 07:21:18 · answer #6 · answered by bold4bs 4 · 0⤊ 1⤋
It's uncertain and there are in fact many answers to this question
2016-08-23 21:52:52 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Sounds really interested
2016-07-28 10:07:14 · answer #8 · answered by ? 3 · 0⤊ 0⤋
Exactly $0.00, assuming that you are receiving it as beneficiary.
2007-03-23 07:58:28 · answer #9 · answered by Bostonian In MO 7 · 0⤊ 1⤋