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Dec 30th, 2023
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 Tax question
#13936741
03/25/21 11:36 PM
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Joined: Oct 2006
Posts: 95,830
Bigbob_FTW
OP
Big Sprocket Bob
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OP
Big Sprocket Bob
Joined: Oct 2006
Posts: 95,830 |
I have a life insurance policy that pays dividends. They roll over into the policy to increase the cash value. This year I took a payment out from the accumulated dividends. What are my tax implications? I've so far not received a 1099.
![[Linked Image]](https://texasfishingforum.com/forums/pics/usergals/2017/07/full-20284-169975-biyl8lail.jpg) ![[Linked Image]](https://texasfishingforum.com/forums/pics/usergals/2017/07/full-20284-169974-image_preview.jpg) FJB
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Re: Tax question
[Re: Bigbob_FTW]
#13936750
03/25/21 11:42 PM
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Joined: Oct 2012
Posts: 2,803
Mudman63
Extreme Angler
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Extreme Angler
Joined: Oct 2012
Posts: 2,803 |
You’re screwed, Uncle Joe has got you...
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Re: Tax question
[Re: Bigbob_FTW]
#13936755
03/25/21 11:45 PM
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Joined: Aug 2006
Posts: 18,239
COFF
TFF Guru
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TFF Guru
Joined: Aug 2006
Posts: 18,239 |
Should probably be on a 1099-DIV. You should call your insurance company, or sign in online. A lot of entities are not sending physical forms anymore. You can get them electronically, or have to make a special request for it to be mailed.
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Re: Tax question
[Re: COFF]
#13936770
03/25/21 11:55 PM
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Joined: Oct 2006
Posts: 95,830
Bigbob_FTW
OP
Big Sprocket Bob
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OP
Big Sprocket Bob
Joined: Oct 2006
Posts: 95,830 |
Should probably be on a 1099-DIV. You should call your insurance company, or sign in online. A lot of entities are not sending physical forms anymore. You can get them electronically, or have to make a special request for it to be mailed. Thanks coff. I'll get with them tomorrow.
FJB
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Re: Tax question
[Re: Bigbob_FTW]
#13936858
03/26/21 01:16 AM
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Joined: Jan 2010
Posts: 19,892
Emit R Detsaw
TFF Guru
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TFF Guru
Joined: Jan 2010
Posts: 19,892 |
Should probably be on a 1099-DIV. You should call your insurance company, or sign in online. A lot of entities are not sending physical forms anymore. You can get them electronically, or have to make a special request for it to be mailed. Thanks coff. I'll get with them tomorrow. Yeah, since you said that you took the money this year, you won't get a 1099 until next Jan/Feb time frame, but they might be able to tell you what if any they paid to the IRS or if you are on the hook at the end of the year to cover any taxes on the withdrawal.
May you be treated the way you treat other people, today and everyday!
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Re: Tax question
[Re: Emit R Detsaw]
#13936863
03/26/21 01:18 AM
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Joined: Oct 2006
Posts: 95,830
Bigbob_FTW
OP
Big Sprocket Bob
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OP
Big Sprocket Bob
Joined: Oct 2006
Posts: 95,830 |
Should probably be on a 1099-DIV. You should call your insurance company, or sign in online. A lot of entities are not sending physical forms anymore. You can get them electronically, or have to make a special request for it to be mailed. Thanks coff. I'll get with them tomorrow. Yeah, since you said that you took the money this year, you won't get a 1099 until next Jan/Feb time frame, but they might be able to tell you what if any they paid to the IRS or if you are on the hook at the end of the year to cover any taxes on the withdrawal. OK that makes sense, thanks!
FJB
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Re: Tax question
[Re: Bigbob_FTW]
#13936890
03/26/21 01:43 AM
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Joined: Mar 2014
Posts: 683
Resh
Pro Angler
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Pro Angler
Joined: Mar 2014
Posts: 683 |
Distributions from life insurance are non reportable, non taxable unless you have a modified endowment contract. If you had one, you’d know because you’d have mail from the insurance company telling you your contract became a MEC.
In short, your tax implication is 0, that’s why you own that stuff
There are no fish in sonic pond EDIT: Except 1 20lb catfish
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Re: Tax question
[Re: Resh]
#13936899
03/26/21 01:48 AM
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Joined: Oct 2006
Posts: 95,830
Bigbob_FTW
OP
Big Sprocket Bob
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OP
Big Sprocket Bob
Joined: Oct 2006
Posts: 95,830 |
Distributions from life insurance are non reportable, non taxable unless you have a modified endowment contract. If you had one, you’d know because you’d have mail from the insurance company telling you your contract became a MEC.
In short, your tax implication is 0, that’s why you own that stuff But they withheld taxes.
FJB
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Re: Tax question
[Re: Bigbob_FTW]
#13936909
03/26/21 01:54 AM
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Joined: Mar 2014
Posts: 683
Resh
Pro Angler
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Pro Angler
Joined: Mar 2014
Posts: 683 |
Distributions from life insurance are non reportable, non taxable unless you have a modified endowment contract. If you had one, you’d know because you’d have mail from the insurance company telling you your contract became a MEC.
In short, your tax implication is 0, that’s why you own that stuff But they withheld taxes. Then the question to ask your insurance company/agent is if it’s a modified endowment, MEC for short. Life insurance is irs section 7702 and not subject to taxes unless something gets messed up. It’s an easy answer to get and doesn’t require them doing any research. If it’s a MEC, to answer your question it would taxed as ordinary income. No penalties just income
There are no fish in sonic pond EDIT: Except 1 20lb catfish
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Re: Tax question
[Re: Bigbob_FTW]
#13936930
03/26/21 02:18 AM
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Joined: Aug 2014
Posts: 7,275
Beer Money
TFF Celebrity
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TFF Celebrity
Joined: Aug 2014
Posts: 7,275 |
I'll give $50 cash to be the beneficiary on that policy.
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