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No. That's why the proceeds aren't taxed as income.

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Correct...premiums are taxable. Death benefits are generally not taxed as income. Also if it is permanent life insurance policy and has some cash value built up and you take that cash out, the amount of cash less the premiums paid into the policy ("your gain") is taxable.

Additional comment:

Actually, if you take your cash value out as a loan, you do not have to pay taxes on "gains" as long as the life insurance is in place, hopefully until you die.

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Q: Are life insurance premiums deductible on year end taxes?
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Universal life insurance premiums tax deductible?

NO. Life insurance premiums would NOT be deductible on your 1040 federal income tax return.


Are taxes taken out of life insurance?

Personal life insurance proceeds are generally paid out free of income taxes as long as the premiums were paid with after-tax dollars. But if a business paid the premiums and deducted the premiums as an operating expense, then the life insurance proceeds would be taxable to the beneficiary.


Are mortgage insurance premiums deductible on your taxes?

No they are not or the death benefit would be taxable. Since you said mortgage insurance I am assuming that you mean PMI or Private mortage insurance and not mortgage life insurance. Yes, mortgage insurance is tax deductible as of 2007. You can see the amount of PMI paid for the year on the final escrow statement that your mortgage lender sends you in December or January.


Is money gained from a life insurance inheritance taxable income?

No. Death benefits from life insurance are not taxable. The only way that it could be taxes is if you illegally deducted your premiums on your tax returns. As long as the premiums are paid with after- tax money, there is no income tax on death benefits.


Do you have to pay taxes on life insurance?

Life insurance death benefits are paid out tax-free as long as your premiums were paid with after-tax money. If you have a cash value life insurance policy and surrender the policy, you may be subject to a taxable gain if the total cash value exceeds the cost basis of the policy.

Related questions

Do you have to pay taxes on premiums for an indivdual life policy?

Life insurance premiums are not tax deductible, in general. However, group life insurance premiums are deductible for a business if the death benefit is $50,000 or less. Also, using key man insurance and executive bonus mechanisms, sometimes there can be some tax advantages. But, the premium is not deductible.


Universal life insurance premiums tax deductible?

NO. Life insurance premiums would NOT be deductible on your 1040 federal income tax return.


Are life insurance premiums paid tax deductible by a business?

no,


Can you deduct life insurance premiums on taxes?

No


Are taxes taken out of life insurance?

Personal life insurance proceeds are generally paid out free of income taxes as long as the premiums were paid with after-tax dollars. But if a business paid the premiums and deducted the premiums as an operating expense, then the life insurance proceeds would be taxable to the beneficiary.


Are mortgage insurance premiums deductible on your taxes?

No they are not or the death benefit would be taxable. Since you said mortgage insurance I am assuming that you mean PMI or Private mortage insurance and not mortgage life insurance. Yes, mortgage insurance is tax deductible as of 2007. You can see the amount of PMI paid for the year on the final escrow statement that your mortgage lender sends you in December or January.


Is buy sell agreement disability income insurance premiums tax deductible?

No. Also, it is probably not a good idea to try and deduct the premiums for diability or life insurance because if you deduct the premiums or if the employer pays the premiums then any benefits are then taxable. You certainly would not want to have to pay income tax on a large life insurance benefit just because you wanted to deduct a few hundred dollars of insurance premiums.


Can you deduct life insurance on taxes?

Generally as personally owned life insurance you would not deduct the premiums on your taxes. This would make the normally nontaxable death benefit subject to taxation.


Is there any life insurance that has single digit premiums?

Life insurance premiums vary by policy. There are few that offer single digit premiums.


Are losses on the excess of premiums paid over the amount of the total cash value amount of a whole life insurance policy deductible for income tax purposes?

No.


Do you have to pay taxes on life insurance inheritance?

Taxes on a individual life insurance policy is generally not taxable in any manner. A main factors in deciding the taxabiity of this is who paid the premiums for the life insurance and whether or not it was deducted on a tax return. If the premium was paid through a group life plan where the employer paid the premiums entirely then it would be taxable. Most employee benefit plans are set up by professionals who are aware of such things and make sure that the small premiums for the life and disability insurance are paid by the employee with after tax money so that tax problems do not arise.


Where can I find information on life insurance premiums?

You can find information of life insurance premiums, and what their purposes are by asking your current insurance company provider for information on it.