QUESTION
I am a life insurance beneficiary, how will this affect my social security income?
Asked on Jan 29th, 2015 on Estate Planning - Texas
More details to this question:
I am receiving 10,000.00 from dad's life insurance. There is nothing left from dad. No property or money or annuities. I need to pay for the funeral and last bill expenses and the other children say that in the will it is to be split out evenly as the estate. Will I have to claim it as income even though others get the money and will I be taxed? How will this effect my small social security income? Please help I have nothing. I have not been able to work for the last 5 years to take care of dad which needed 24 hour care and I have nothing left and I need answers before I give the money. I don't want to do wrong and get homeless or worse.
1 ANSWER
Wills and Estate Planning Attorney serving Sugar Land, TX
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Law Offices of Kimberly D. Moss, PLLC
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You received this money as the result of a life insurance payout. Regardless of how much of the money you actually get to keep, proceeds from a life insurance policy are not taxable. For more information about this, please check out this useful IRS FAQ page: http://www.irs.gov/uac/Taxable-or-Non-Taxable-Income%3F-1 It doesn't appear you have anything to worry about, but if you really want to be sure, consult with an accountant.
Answered on Feb 02nd, 2015 at 1:13 PM