Life Insurance 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? By Penny Gusner Penny Gusner Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s. | Updated on January 13, 2016 Why you should trust Insure.com Quality Verified At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria. A 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. Penny GusnerContributor . .Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s. Related Articles Can I take out a life insurance policy on my spouse? By Penny Gusner What happens to the cash value of my whole life insurance policy when I die? By Nupur Gambhir What is guaranteed cash value in a life insurance policy? By Laine Adley Can I withdraw money from my term life insurance? By Nupur Gambhir Do life insurance policies pay out if a person dies of old age? By Les Masterson Can you cash in a paid up life insurance policy? By Les Masterson