QUESTION
Will I have to pay tax on the life insurance I received?
Asked on Jan 29th, 2015 on Taxation - Michigan
More details to this question:
I recieved 10,000 as beneficiary but I have to give to 7 children. Do I pay tax? How do I find out how much and does this effect my social security? Must I pay funeral expenses out of this also?
5 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Life insurance is generally exempt from income tax so there will be no income tax. Life insurance will not affect your social security. And receiving life insurance does not make you liable for the funeral expenses.
Answered on Feb 09th, 2015 at 1:44 AM
Your first step is to make an appointment with an attorney specializing in estate administration and a CPA who also handles such matters. Failure to do so is hazardous to your situation.
Answered on Feb 04th, 2015 at 1:15 PM
Personal Injury Attorney serving Greenville, SC
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The Greene Law Firm, P.A.
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If you are the named beneficiary of a life insurance policy, you do not pay taxes when you receive the death benefits. You do not have to pay funeral expenses from the proceeds.
Answered on Feb 03rd, 2015 at 1:28 PM
The facts presented don't provide enough information for a definitive answer, but, in all likelihood, no. There will be no income tax and no estate or inheritance tax.
Answered on Feb 03rd, 2015 at 1:17 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Generally life insurance proceeds are not taxable. As for the effect of the receipt of the proceeds on social security, that cannot be answered without additional facts. Generally you would not be liable for the funeral expenses, but again, the detailed facts are necessary to form a firm opinion.
Answered on Feb 03rd, 2015 at 1:17 PM