Do I need to pay personal income tax?
I have been receiving a monthly disability income from my private disability insurance company, is this taxable? I know for a fact that the social security disability income (SSDI) that I have been receiving is not taxable because the amount is not sufficient to file a tax return, but I am not sure about the private disability insurance benefits. I live in California. If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive for your disability as income on your tax return.
Public Comments
- A personal health record or PHR is typically a health record that is initiated and maintained by an individual. An ideal PHR would provide a complete and accurate summary of the health and medical history of an individual by gathering data from many sources and making this information accessible online
- http://www.irs.gov/faqs/faq4-9.html seems to indicate yes. You might, however, still be in an income bracket where it will make little difference. You might find it easier to step through it with a product like Turbo Tax since it will prompt for types of income and sort it out for you.
- It depends on if the premium for the insurance was paid with pre-tax dollars or not.
- As long as your accountant (or yourself if you filed your own tax returns) did not deduct the premiums you paid for the disability insurance you will recieve the benefit tax free. The benefit should be between 60-70% of your income which is essentially what you would be taking home with your taxable pay check. If you have an accountant you may want to double check with them, but most accountants don't like to deduct any insurance premiums becuase of the taxable consenquences if a claim is ever filed.
