How do you report life insurance income on your federal tax return?
filed in finance on Feb.01, 2010
How do you report life insurance income on your federal tax return?
My dad passed away recently and we got a check for $10,000 from his life insurance. The check was for my wife and I, but we are not legally married. How do we report that?
February 1st, 2010 on 2:31 am
Best Answer – Chosen by Voters You will not have to report the $10,000 as income and will not pay income taxes on it. You will have to pay taxes on any interest or investment income you earned on the $10,000 during the year. Source(s): My blog post about life insurance taxation: http://gardenstatelifeinsurance.blogspot…
February 1st, 2010 on 2:31 am
Life insurance proceeds are not taxable unless a portion of the payout included interest. Interest is only paid if they delayed in paying the claim and that would be unusual with a $10k payout. You don't report it.
February 1st, 2010 on 2:31 am
The IRS does not tax proceeds from life insurance payments to beneficiaries, and you do not need to report it. You need to check with your state tax department to see if they do have a tax for the payout. Sorry to hear about your dad.
February 1st, 2010 on 2:31 am
your allowed one untaxed gift for 10k or less. maybe it qualifies. talk to an lawyer or tax accountant. Turbo tax walks you through.
February 1st, 2010 on 2:31 am
Ask your reprisenitve where because all states are different .
February 1st, 2010 on 2:31 am
Life insurance proceeds are not taxable, but I'm not sure where you put them on the form.
February 1st, 2010 on 2:31 am
I don't believe that life insurance proceeds are taxable, but interest from investing them is. Call the IRS and ask them!P. S. Depending on where you live and the laws that govern your area, referring to your partner as "my wife" could mean you ARE considered legally married under common law.