Insurance
The most frequently asked tax questions related to Insurance
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Answer Tax QuestionsIs the insurance reimbursement for excess living costs when the fire made me vacate my house taxable?
Asked Thursday, October 12, 2000 by an anonymous user
The reimbursement is generally tax- free if you are paid under an insurance policy for living expenses resulting from the loss of occupancy or for a loss of use of your residence when your principal residence is destroyed or damaged by fire, storm or other casualty. Speak to your local CPA about the taxability of your reimbursement.
If I did not file an Insurance claim, can I still claim a deduction on my tax return?
Asked Thursday, October 12, 2000 by an anonymous user
If you are insured for the full loss you incurred, but you do not file a claim, you cannot claim a deduction on your tax return.
Is my doctor's malpractice insurance deductible ?
Asked Thursday, October 12, 2000 by an anonymous user
A doctor who is not self-employed, but works for a hospital, may deduct premium costs as an Itemized deduction on IRS Schedule A. A self-employed doctor may deduct the premium costs of malpractice insurance as a business deduction.
Insurance payments made for embezzlement - deductible?
Asked Thursday, October 12, 2000 by an anonymous user
Insurance policy premiums paid for the protection of your business covering situations such as embezzlement, burglary, accident, fire, storm, theft, workman's compensation, and public liability, are business expenses and are deductible.
Is the exchange of one life insurance policy for another one taxable?
Asked Thursday, October 12, 2000 by an anonymous user
The exchange of one life insurance policy for another one is considered a tax-free exchange. Also, an exchange of an annuity contract for another annuity contract with identical recipients is a tax-free exchange. An endowment policy for another endowment policy that provides for regular payments beginning no later than the date payements would have started under the old policy is considered a tax-free exchange.
Why do I have to pay Worker's Compensation for independent contractors ?
Asked Saturday, September 30, 2000 by an anonymous user
You only have to pay Worker's Compensation for independent contractors who do not have their own coverage of Workers Compensation insurance. They should provide a certificate of insurance to the "employer" to show evidence of their own coverage. Workers Compensation laws vary from state to state, but generally speaking these laws protect the employer as well as the worker. Anyone injured on the job will be covered and the employer is generally protected from lawsuits arising from injury on the job by an employee.
Is term insurance better than whole life insurance ?
Asked Friday, September 29, 2000 by an anonymous user
The answer depends on your personal objectives and needs. Term life insurance is much less expensive over the guaranteed premium period of the policy, which can be as long as thirty years in some states. However, if your family's need for life insurance exceeds the guaranteed period, then whole life can end up being less expensive. Also, whole life insurance builds cash value within the policy that can be a source of capital to meet living needs.
What are the tax advantages of life insurance ?
Asked Sunday, September 03, 2000 by an anonymous user
First of all, life insurance is generally not deductible as a business expense. However, life insurance can provide a tax-free accumulation of cash value. Most importantly, the proceeds paid upon the death of the one who is named on the life insurance policy, is tax-free to the beneficiaries, if the policy is not held within a pension plan. Life insurance is often used to provide liquidity for the payment of estate taxes or the buyout of a business interest upon the death of one partner. Meet with a CPA to discuss your situation in detail. There are many types of life insurance policies. A CPA can determine which type of policy is suitable for your needs.
What is single premium life insurance ?
Asked Sunday, September 03, 2000 by an anonymous user
Insurance companies offer policies that allow for one premium payment to be made. The premium is large enough to pay for life insurance coverage for many years because part of the money is going into an investment vehicle which will fund the future cost of the insurance policy.