when you collect on insurance, do you have to claim that on your taxes?

Answer 1

Disability income can be taxable if your employer pays all of the premium or if you pay the premium using pre-tax dollars. Life benefits can be subject to estate tax if the proceeds are left to the estate and not to a named person. Health, life paid to a person, auto, homeowners, etc benefits are not taxable because they are not earned income or replacing earned income. The insurer or your employer will send you a W2 (or other appropriate tax form) in the event your benefit is taxable and needs to be filed.

Answer 2

the answer depends on a couple of things such did you pay the premiums or did your employer, or did you deduct the premiums paid (yes that can be done but is not avisable).

Generally speaking life insurance, health insurance, disability insurance and your home and auto insurance are not taxable when you recieve the claim or in the year you recieve the claim as income.

Life insurance does however get added into your estate for estate taxes for all policies you own. That is why it is best to have a irrevocable trust own the life insurance if you think you will be over the estate tax exemtion amount.

Hope this helps.

Answer 3

Mostly the answer is no. Life , health and Property/ Casualty is paid out to recover from some kind of loss. ----examples
death of a loved one, surgey , your house burns down etc;


The only common insurance that can be taxable is employer provided disability insurance. If your employer covers the premium --- its taxable on your 1040. If you pay the premium out your income (via payroll deduction or check book ) then it is not taxable.

Also, unemployment insurance is taxable too.



I hope this helps



Terry

Answer 4

1. No, insurance paid out is tax free coz you are using after tax money to pay the premium.

2. Yes, if this is a key man insurance where company use before tax money. this is only applicable if the company already declare insurance premiums as expenses in their account.

Answer 5

It depends, but yes, you may well have to pay taxes on an insurance payout.

You have not stated what type of insurance is involved or the circumstances surrounding it. However, let's say you insured a baseball card collection for $10,000 and your cost basis is $4,000. If it is stolen and you are paid the $10,000, that becomes a capital gain. Otherwise, a lot of art would get stolen every year.

Some more details, please.

Answer 6

When you sustain a loss covered by insurance do you take it as a write off on your taxes? Does that help you answer your question?

Answer 7

NO!

Because for your possessions you are simply replacing them.

Life insurance is also not taxable.

An insurance annuity, however, could incur some taxation.

Send Out Cards! http://www.squidoo.com/gosendoutcards

Answer 8

No, because insurance isn't a net GAIN, it puts you EVEN, so it's not a taxable event.

Answer 9

Since you paid taxes on the money you paid for premiums, no. ~

Answer 10

I would say no......I've never heard of that.