Do i file inc-tax when reciving disability for life? No taxes are taken out.?

Answer 1

Depends upon the source of the disability.

If it's Social Security or most state plans it's not taxable if its your only income.

If it was a commercial insurance policy that you paid for with tax paid dollars, it's not taxable.

If it was a commercial insurance policy that you paid for with pre-tax dollars, such as through your employement, it is fully taxable as ordinary income.

If it's commercial policy that was paid for by your employer, it is fully taxable as ordinary income.

If it was partly paid with tax paid dollars and part with pre-tax dollars or partly by your employer you must apportion the benefit based upon how much was paid by you with tax paid dollars. That portion is not taxable but the remainder is.

Answer 2

I find myself regularly playing back-up to the Brilliant Bostonian! Depends on the source of the disability, etc. Guess I should stick with answering H&R Block-specific questions, but I'm getting tired of typing the qualifications for the pre-season line of credit... ::yawn::