Disney Information Station Logo

Go Back   The DIS Discussion Forums - DISboards.com > Just for Fun > Community Board
Find Hotel Specials & DIScounts
 
facebooktwitterpinterestgoogle plusyoutubeDIS UpdatesDIS email updates
Register Chat FAQ Tickers Search Today's Posts Mark Forums Read





Reply
 
Thread Tools Rate Thread Display Modes
Old 02-11-2013, 05:33 PM   #1
TheIncredibles!
Winner (?) of the Crazy MIL Award!
 
TheIncredibles!'s Avatar
 
Join Date: Nov 2010
Posts: 1,497

Another tax question

I usually do our taxes on Turbo Tax. Haven't used an accountant in 10 years. We don't even have one.

This year I am unsure. My father passed away in May. I was one of the beneficiaries of a life insurance policy he had and I also got some of his 401(k). What are the tax implications if any for either of these?
TheIncredibles! is online now   Reply With Quote
Old 02-11-2013, 05:41 PM   #2
disneymarie
Its a rumour about the donuts...
Can we play Nancy Drew?
 
disneymarie's Avatar
 
Join Date: Aug 2007
Posts: 3,616

Quote:
Originally Posted by TheIncredibles! View Post
I usually do our taxes on Turbo Tax. Haven't used an accountant in 10 years. We don't even have one.

This year I am unsure. My father passed away in May. I was one of the beneficiaries of a life insurance policy he had and I also got some of his 401(k). What are the tax implications if any for either of these?
I am not sure but, I did use turbo tax many years now, maybe 15. I don't remember the ins. money being taxed, the estate was because there was no will the portion dh received of cash Turbo had a place for.
Just our experience.

But, dis'ers are great with tax information help.
__________________
disneymarie is offline   Reply With Quote
|
The DIS
Register to remove

Join Date: 1997
Location: Orlando, FL
Posts: 1,000,000
Old 02-11-2013, 07:53 PM   #3
jd4nati
Mouseketeer
 
jd4nati's Avatar
 
Join Date: Aug 2012
Location: Sunny So Cal
Posts: 90

Life insurance proceeds are not taxable to the recipient. I know this from experience from when my father passed away. I'm not sure about the 401k proceeds though.
jd4nati is offline   Reply With Quote
Old 02-11-2013, 08:35 PM   #4
DebbieB
DVC Member BWV 99
You have to compare apples to apples
 
DebbieB's Avatar
 
Join Date: Aug 1999
Location: PA
Posts: 47,176

Life insurance is definitely not taxable, it's considered an insurance claim.

I found some info on 401K:

http://www.finweb.com/retirement/401...ter-death.html

http://moneyover55.about.com/od/Reti...-Money-Out.htm

Was it processed through the estate? I was the executor of my mom's estate and we had to pay estate taxes on her CD's and bank accounts.
__________________
DebbieB is offline   Reply With Quote
Old 02-12-2013, 06:37 AM   #5
TheIncredibles!
Winner (?) of the Crazy MIL Award!
 
TheIncredibles!'s Avatar
 
Join Date: Nov 2010
Posts: 1,497

These are separate from the estate. The estate has not been settled yet because of complications with some properties etc. thanks for all your help.
TheIncredibles! is online now   Reply With Quote
Old 02-12-2013, 06:41 AM   #6
deserrai
DIS Veteran
 
deserrai's Avatar
 
Join Date: Feb 2012
Posts: 682

Life insurance proceeds are not taxable. The 401(k) will be, but you should receive a 1099-R showing the distribution.
__________________
Deserrai

deserrai is offline   Reply With Quote
Old 02-12-2013, 06:43 AM   #7
Laurabearz
I cant load my bobbin!
three kids keep me hopping
I was Grunge before Grunge was Grunge

Hot for Danny DeVito!
 
Laurabearz's Avatar
 
Join Date: Nov 2001
Location: 4.53 miles from PatrickIL' s house (would rather live by Universal to see if the Mummy ride will be open before May 21st!)
Posts: 13,743

I am thinking about using turbo tax for the first time. Any suggestions on which version?

Thanks

Sent from my iPhone using DISBoards
__________________
1/02 OKW 4/02 Offsite 5/02 BC/Poly 8/02 The Plaza NYC 9/02 BWV/RPR 10/02 HHI GV 12/02 OKW 9/03 VWL 11/03 BWV2/04 OKW/VB5/04 BWV/HRH6/04 HHI 10/04 BCV1/05 OKW 6/05 HHI 9/05 CR/Wonder 12/05 HRH/BWV 5/06 DLR 6/06 BWV 7/06 HHI 10/06 BWV/HRH 11/06OKW/RPR4/07 SSR 7/07 HHI 10/07 OKW/Magic/VWL 12/07 OKW 6/08 DLH 8/08 OKW/HRH10/08 BWV/RPR11/08 OKW/POP2/09 YC/RPR3/09 SSR 6/09 HHI 8/09 RPR/AKVJ/BWV/ASMo10/09 RPR2/10 FWCabins 4/10 BWV08/10 RPR/OKW10/10 BWV1/11 SSR 1/11BCV6/11 RPR/BCV11/11 BCV/AKJSAV 1/12 AKJSAV
On the Horizon HHI 6/12

Universal Orlando is Disney's Best Kept Secret!
Laurabearz is offline   Reply With Quote
Old 02-12-2013, 07:28 AM   #8
mrspaha
Mouseketeer
 
Join Date: May 2004
Location: Illinois
Posts: 430

You should get a form 1099-R for both of these. Usually, the life insurance payout is not taxable. However, there are some policies where the payout includes interest that has been earned, and the amount of income would be taxable. The 1099-R that you receive from the insurance company will indicate the amount (if any) that is taxable.

The 401K is going to be taxable to you this year, unless you have set it up in an "inherited IRA" account of your own. There are certain rules you would then have to follow regarding the distributions. You will record the income and pay taxes as you take the distributions.

I would think that all of the tax programs would have a section for these distributions. The important thing is to be sure to input all of the information from the 1099's.
mrspaha is offline   Reply With Quote
Old 02-12-2013, 07:59 AM   #9
Dan Murphy
We are family.
 
Dan Murphy's Avatar
 
Join Date: Apr 2000
Location: Chicago area, IL
Posts: 78,107

Quote:
Originally Posted by mrspaha View Post
You should get a form 1099-R for both of these. Usually, the life insurance payout is not taxable. However, there are some policies where the payout includes interest that has been earned, and the amount of income would be taxable. The 1099-R that you receive from the insurance company will indicate the amount (if any) that is taxable.

The 401K is going to be taxable to you this year, unless you have set it up in an "inherited IRA" account of your own. There are certain rules you would then have to follow regarding the distributions. You will record the income and pay taxes as you take the distributions.

I would think that all of the tax programs would have a section for these distributions. The important thing is to be sure to input all of the information from the 1099's.
Correct.

(not to be taken as financial or tax advice)

Quote:
Originally Posted by Laurabearz View Post
I am thinking about using turbo tax for the first time. Any suggestions on which version?

Thanks
Hi Laura.

http://turbotax.intuit.com/personal-...stionnaire.jsp
__________________
Dan-'Let's Celebrate the Future Hand in Hand'--We are Family

Why she runs.....

Random acts of kindness, no matter how small, are never really lost. They live forever in the hearts of those who are fortunate enough to be on the receiving end of them----Lady M
dmurphydis@sbcglobal.net







.
Dan Murphy is online now   Reply With Quote
Old 02-13-2013, 03:44 PM   #10
TheIncredibles!
Winner (?) of the Crazy MIL Award!
 
TheIncredibles!'s Avatar
 
Join Date: Nov 2010
Posts: 1,497

Ok looked through all my papers, I have no tax papers for the 401(k) or for the insurance. If it matters the 401(K) was not merged with my own, it is separate. Not sure if it is set up as an "inherited IRA" but this is what is listed on the tons of mail I get regarding this - lol :

IRA FBO MY NAME
Pershing LLC AS CUSTODIAN
B/O FATHERS NAME DECEASED

I am just going to go through the motions with Turbo Tax and see if anything comes up as an issue.
TheIncredibles! is online now   Reply With Quote
Old 02-13-2013, 05:54 PM   #11
DebbieB
DVC Member BWV 99
You have to compare apples to apples
 
DebbieB's Avatar
 
Join Date: Aug 1999
Location: PA
Posts: 47,176

I would be very careful, you don't want to be hit with tax penalties down the road. Since 401K's are pre-tax, someone has to pay the taxes on it. Plus depending on your state, there could be estate taxes. I live in PA and pretty much everything my mom owned had to be put through the estate and taxed.
__________________
DebbieB is offline   Reply With Quote
Old 02-13-2013, 06:11 PM   #12
mrspaha
Mouseketeer
 
Join Date: May 2004
Location: Illinois
Posts: 430

To be on the safe side, I would call both the insurance company and the company that handled the 401K (basicially call whoever sent you the check and who transferred the 401K), and ask them directly if they issued a 1099. It's possible that it was sent to a different address - perhaps a lawyer who handled the estate or possibly it was even lost in the mail.

It's very important to find out if there was a 1099, and important to input the 1099 into Turbo Tax. Since companies who send out the 1099's also send a copy to the IRS, the computers at the IRS will eventually realize if someone did not report all of their income. At that point (which could be much later this year), you would get a tax notice from the IRS, for not reporting income and as the previous poster stated, you would get a bill for additional taxes plus interest plus penalties.

It is very possible and in fact, very probable, that you do not owe taxes. But the fact that you did receive income means that you must report that income on your tax return.

Turbo Tax can't tell you that until your input the info from your 1099's.
mrspaha is offline   Reply With Quote
Reply



Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

facebooktwitterpinterestgoogle plusyoutubeDIS Updates
GET OUR DIS UPDATES DELIVERED BY EMAIL



All times are GMT -5. The time now is 02:44 PM.

Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

Copyright © 1997-2014, Werner Technologies, LLC. All Rights Reserved.