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Q

I received money from my deceased mom’s life insurance. Will I be taxed on this money or need to report it on my taxes as income?

A

Tax question about life insuranceA nice benefit of receiving a life insurance payout is that the money generally is not taxable.

The Internal Revenue Service says that if you receive the money as a beneficiary of a life insurance policy, the money isn’t counted as gross income and thus doesn’t need to be reported on your federal taxes.

There could be taxes owed if the life insurance policy owner were someone other than your mother. To find out if this would affect your family’s situation, read Life insurance tax surprise: The unholy trinity.

Last updated: Jan. 13, 2016