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 Posted: Sat Aug 29, 2009 9:43 pm Post subject: Will they take taxes out, or how does that work? |
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| I will be receiving death benefits from my dads life insurance policy, because me and my 5 sister were the beneficiarys. The total amount we will receive is 42,000 split 5 ways...8,400. |
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jazziefuller
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Joined: 29 Aug 2009
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| Posted: Tue Sep 01, 2009 11:27 am Post subject: |
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You don't need to file your tax returns for this amount if the death benefit received by you is less than the death benefit paid on the death of the policy holder.
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anonymous00
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| Posted: Wed Sep 02, 2009 2:16 am Post subject: |
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I'm not sure what this means:
| Quote: | | You don't need to file your tax returns for this amount if the death benefit received by you is less than the death benefit paid on the death of the policy holder. |
Huh??? Well, no matter.
Life insurance death benefits are almost always received tax-free by a named beneficiary, regardless of the amount. Any interest included within a settlement is taxable at ordinary income tax rates.
That's all there is to it. Doesn't sound like you'll incur any type of taxable problem here! 
InsTeacher  |
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InsTeacher
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| Posted: Wed Sep 02, 2009 6:36 am Post subject: insurance |
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Thank so much. Does this mean if the check is for 8400, Ill recieve 8400?
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imadeit
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| Posted: Wed Sep 02, 2009 11:46 am Post subject: |
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| No taxes will be withheld. If your share is supposed to be $8,400, you will receive $8,400 and you won't owe any taxes. It is possible that on top of the $8400, you may receive some interest. It is only on this additional money that you will have to pay taxes. |
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InsuranceExpert
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