michigani
02-22-2008, 03:34 PM
For 10 years I paid POST-TAX premiums for disability insurance. This was to result in a Tax-free benefit if I ever needed it. Well, I need it. 3 years ago I was diagnosed with muscular dystrophy and went on disability. My social security is complemented with this private insurance benefit.
There's no where on form 1040 to list tax-exempt income. A family friend that works for a big tax company said just don't list it, it's not taxable. Now I'm being audited :mad:
Has anyone else paid post-tax premiums then collected the benefit? I thought I was doing the wise thing.
How do you handle it at tax time? Metlife sent the IRS a W-2 as if it were wages.:confused:
Mark
There's no where on form 1040 to list tax-exempt income. A family friend that works for a big tax company said just don't list it, it's not taxable. Now I'm being audited :mad:
Has anyone else paid post-tax premiums then collected the benefit? I thought I was doing the wise thing.
How do you handle it at tax time? Metlife sent the IRS a W-2 as if it were wages.:confused:
Mark
Sponsor
Executor
02-23-2008, 12:53 AM
Per IRS rules, if you paid your disability premiums with post tax income, the tax payments (from your policy) are tax free. If you paid your disability premiums with pre-tax dollars, you policy is taxable.
SS disability is taxable. So, if you receive both, one is taxable, the other is not. For the not taxable part, there is no need to list any income. It will all get straighted out in the audit.
Good luck.
SS disability is taxable. So, if you receive both, one is taxable, the other is not. For the not taxable part, there is no need to list any income. It will all get straighted out in the audit.
Good luck.