Question

Life insurance

Forum|Forum|1 year ago
February 6, 2025
1 reply
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My wife stopped her life insurance and took all the money in it. I am guessing it was an annuity, anyway we have been paying into it for a long time so we got the check and the money was taking out for Fed tax . the amount was 51,000.00 TAXABLE was 9,000.00 but turbo tax is calling it retirement money and has added it to our income. I filled out the 1099-R information

Should just not worry about how turbo tax is calling it??

TurboTax Home & Biz Windows

SharonD007

TurboTax is calling it retirement income because the withdrawal was reported on a 1099-R. 1099-Rs are used to report annuities, pensions, IRA's, and other retirement income.

For more information, refer to the TurboTax Help article When to Use Tax Form 1099-R: Distributions From Pensions, Annuities, Retirement, etc.

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R

Rodstaxes1Author

This was life insurance isn't there a difference between an annuity and life insurance??? I don't know if it was an annuity. The company is call accordia Life AND annuity. Is there a different form I should fill out for life insurance withdrawal

T

ThomasM125

Since you had a surrender value benefit, it is treated like a pension plan withdrawal. The life insurance policy with a surrender value is life insurance unless you cash it out before the death of the policy holder.

The $9,000 taxable amount is the earnings on the money put into the plan, if that is paid out as a death benefit, it is not taxable. If you take it out before then, it becomes taxable.

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